U.K. Reopens Weavering Investigation

Jul 9 2012 | 12:38pm ET

Just over a month after the head of Weavering Capital was found liable for a US$600 million fraud, British investigators are reopening their probe into the collapsed hedge fund.

The Serious Fraud Office dropped its case in September. Despite two-and-a-half years of searching, deciding that it was unlikely to win a conviction in the case. But the High Court in London in May levied US$450 million in damages against Weavering chief Magnus Peterson. The judge in that case ruled that Peterson and Weavering had misled clients.

The SFO said that the civil case decision led to the reopening of the investigation.

"The director, following a review of the High Court Civil judgment by Mrs. Justice Proudman on the 31 May 2012, has reopened a criminal investigation into Weavering Capital UK," the agency said on its Web site.

The SFO arrested two men, including Peterson, in 2009.

"The decision of the SFO to re-open the investigation is welcomed by Weavering's investors," Barnaby Stueck, a lawyer for the liquidators who won the judgment against Peterson in May, told the Reuters. "They and the professional advisers involved in the case will provide every assistance to the SFO."

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