Police Raid Italian Hedge Fund Manager In Renewed Fraud Probe

Nov 17 2011 | 12:42pm ET

A prominent Italian finance professor and former hedge fund manager faces a local criminal investigation into allegations that he defrauded investors.

Italian police on Tuesday raided the home and office of Alberto Micalizzi, whose London-based hedge fund, Dynamic Decisions Capital Management, collapsed in 2009 after losing the lion's share of its assets in 2008. Prosecutor Alfredo Robledo told Reuters that he and his co-prosecutor, Tiziana Siciliano, "found some very significant materials" among the documents and computers seized in the searches.

The renewed investigation into Micalizzi and Dynamic Decisions follow the decision of the U.K.'s Serious Fraud Office to drop its own probe of the hedge fund last year. Micalizzi, who said he is considering legal action, referred to the SFO's decision in a statement.

"Further investigations carried out in the last three years by other authorities in the United Kingdom… ended up excluding the hypothesis of fraud and clearing up doubts on how the company managed facts which today are reported by certain newspapers as new."

The Italian investigation, and a renewed U.K. probe by the Financial Services Authority, follow an August Reuters investigation that found that almost all of the DD Growth Premium's fund's US$550 million in assets were invested in highly illiquid bonds issued by a company based in a trailer park outside of Phoenix and backed by a global network of shell companies. What's more, Reuters found, the head of the Phoenix company was a fugitive from justice in the U.S. and the head of one of the charities that backed the bonds was a Russian who had been convicted of fraud.

In addition, last year, an Irish judge found that Micalizzi had set up "a fraudulent scheme" and misled investors.

Micalizzi is a professor at Milan's prestigious Bocconi University, where he specializes in options pricing. The school, which said it is cooperating with the investigation, suspended Micalizzi on Tuesday.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

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

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

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

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

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.