Weavering Boss 'Cynically Manipulated' Returns

Oct 31 2011 | 9:46am ET

The liquidators of collapsed hedge fund Weavering Capital blasted the firm's founder as part of its effort to recover money for the hedge fund's investors.

Magnus Peterson and other Weavering employees "cynically manipulated" the fund's performance almost from day one "to pretend that the Macro fund had made a profit," Robert Anderson, a lawyer for the liquidators, said Friday. Anderson also accused Peterson of using swaps with a Weavering-controlled entity that he claims investors knew nothing about to hide losses.

"It is only because you had the ability, in the comfort of your home, just before midnight, three days after trading for the month finished, to put on these two trades which you knew had a guaranteed profit," Anderson said to Peterson, who is representing himself in the High Court case, which began earlier this month. Anderson was referring to a Sept. 1, 2003, trade which he claims allowed Weavering to turn a 19% August loss into a 3% profit.

Weavering collapsed in 2009 after an investigation found that more than 100% of its Macro fund's net assets were tied up in swaps with another Weavering entity. British regulators dropped their probe of Weavering last month, but a Cayman Islands court in August slapped Peterson's younger brother and stepfather, both directors of the Weavering fund, with US$111 million in fines for fraud.

Peterson denied that he used the swaps to hide losses, saying that he and his fellow managers were "finding our feet" during Weavering's early days.

"We didn't have all the routines in place," he said. "It was probably after exchange hours and Friday [and] we wanted to hedge the position."


In Depth

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note