Weavering Founder In Court On Fraud Charges

Jan 7 2013 | 11:02am ET

The head of collapsed hedge fund Weavering Capital made his first appearance in court today to face fraud charges.

Magnus Peterson was hit with six counts of fraud, forgery, fraudulent trading and false accounting last month. The London judge ordered him to surrender his passport and scheduled a hearing at a higher criminal court in three months.

Weavering went into administration in 2009 when it was unable to meet redemptions. At the heart of the alleged US$600 million fraud was the claim that Weavering's assets were worth more than US$530 million, when it actually owned only a single US$637 million swap agreement with a company controlled by the hedge fund itself.

Peterson and another senior Weavering employee, Edward Platt, were arrested at the time. But the U.K. Serious Fraud Office closed its probe last September, deciding it was unlikely to win a conviction. It reopened the case last year, after the London High Court ruled that the Swedish national had misled clients and fined him US$450 million.

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