Wednesday, 28 January 2015
Last updated 1 hour ago
Jun 12 2013 | 9:52am ET
Accused hedge fund fraudster Michael Balboa has gone on trial in New York.
Balboa, who was based in London, faces conspiracy, securities fraud, wire fraud and investment advisors fraud. According to prosecutors, Balboa invested in illiquid bonds, some in Nigeria and Uruguay, which he and two brokers then inflated in value. Those bogus values were then hidden from Millennium Global Investments' independent auditor and trumpeted to Millennium's clients in monthly newsletters. The fund, which claimed to manage US$844 million, collapsed in 2008; Balboa was paid 40% of the fees the fund earned, which amounted to some US$6.5 million.
The two brokers were not charged criminally, although one, Gilles De Charsonville, was sued by the Securities and Exchange Commission.
Millennium Global liquidated Balboa's fund during the financial crisis, costing investors some $1 billion.
Balboa faces up to 20 years in prison if convicted of securities fraud.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…