Hedge Fund Manager's Lawyer Questions Petters Fundraiser

Jun 6 2013 | 11:01am ET

Ponzi schemer Thomas Petters' top fundraiser was grilled by lawyers for the hedge fund manager yesterday over aiding and abetting Petters' fraud.

James Fry's attorneys took aim at Frank Vennes' credibility during their questioning. Vennes is the first of two former Petters executives expected to take the stand as Fry's team builds his defense; whistleblower Deanna Coleman is expected to testify today.

Prosecutors allege that Fry lied to investors in his Arrowhead Capital Management, both about Petters' default on notes owned by the hedge fund and about Vennes' criminal record. Fry, who is not accused of knowing about Petters' fraud, claims he did not knowingly lie to investors.

Yesterday, Joe Friedberg, attempted to show that Vennes had sought to mislead Fry with a letter from another Petters executive, Bob White, explaining that problems in Asia were contributing to late deliveries of close-out merchandise—merchandise which did not exist.

Friedberg suggested that when Vennes asked White to "shore up the letter," he did so to mislead Fry and other Petters business partners. Vennes said he simply wanted an accurate explanation.

Vennes, White and Coleman have all pleaded guilty in the case.


In Depth

Dillon Eustace: The Advantages of ICAVs

Feb 11 2016 | 7:51pm ET

As the growth of alternative investment vehicles continues, global asset managers...

Lifestyle

Citadel's Ken Griffin Donates $40M To New York's Museum of Modern Art

Dec 22 2015 | 9:23pm ET

Citadel founder Ken Griffin has donated $40 million to New York’s Museum of Modern...

Guest Contributor

Hedging Against Reputational Risk in the 21st Century

Feb 12 2016 | 7:18pm ET

For investors, the first step in researching a new fund or manager is to google...