SFO Closes Weavering Case, Declines To Press Charges

Sep 8 2011 | 8:58am ET

The U.K.’s Serious Fraud Office has called off an investigation into the collapsed hedge fund Weavering Capital and has declined to press charges against two senior employees.

The London-based fund run by Magnus Peterson went into liquidation in March 2009 and the SFO arrested Peterson and another senior Weavering employee, Edward Platt, but has now decided not to press charges.

Weavering's principal Cayman Islands hedge fund, the Weavering Macro Fixed Income Fund, claimed to manage assets worth over US$530 million but went into liquidation in March 2009 after it was unable to meet redemptions. An internal probe found that the Cayman fund's only asset was a US$637 million swap agreement with a company controlled by Weavering itself.

Earlier this year, a Cayman Islands court fined two directors of the fund (Peterson’s brother and stepfather) US$111 million each, finding them guilty of willful neglect of duty. Peterson himself is being sued for fraud and breach of duty—his five-week trial is scheduled to begin in the High Court on October 10, 2011.

In a statement, Geoffrey Bouchier of MCR, the Joint Liquidators of Weavering Capital, expressed dismay at the SFO’s action:
 
"The SFO's decision to discontinue its investigation into the actions of Magnus Peterson and Edward Platt comes as a shock and is deeply disappointing to Weavering's investors and creditors."
 
Jones Day partner Barnaby Stueck, who is leading the civil case against Magnus Peterson and others, said:
 
"The SFO’s decision is particularly surprising given the weight of evidence, the proximity of the civil trial and the fact that, in related proceedings, a Cayman Islands judge has already found that Mr Peterson defrauded Weavering's investors.
 
"It has caused investors to raise serious questions about the ability and will of British prosecuting authorities to bring criminal charges in substantial fraud cases, which can only be damaging to the City's position as a centre of international finance.”

Stueck vowed that Weavering investors would do “everything possible to ensure a criminal prosecution takes place.”
 


In Depth

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

The Cult of Loss Aversion: A Call to Rethink Risk in Global Macro Investing

Sep 4 2014 | 5:45am ET

In the wake of a traumatic loss, whether it is financial or personal, it is just...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

In search of the ‘new normal’ at the Fed

The Federal Reserve keeps baby-stepping toward a “normalization” of monetary policy. But just what is normal?

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.