Saturday, 22 October 2016
Last updated 17 hours ago
Jun 24 2014 | 7:50am ET
Former hedge fund manager Michael Balboa has been sentenced to four years in prison for allegedly defrauding investors of nearly $400 million.
Balboa was convicted in December of inflating the value of Nigerian sovereign debt held by his London-based Millennium Global Investments hedge fund by $80 million. The lie would up costing investors more than $390 million, prosecutors alleged, when the hedge fund collapsed in 2008.
The fraud enabled Millennium to collect an extra $6.5 million in fees that it was not entitled to, prosecutors said.
Balboa, whose first trial ended after jurors were unable to reach a verdict, had faced a possible life sentence under federal sentencing guidelines. Prosecutors sought 12 years.
U.S. District Judge Paul Crotty rejected both, saying the former “vastly overstates the seriousness of the offense,” and that Balboa was worthy of leniency due to his family’s reliance on him and his character. Crotty also declined to impose the sentence suggested by Balboa’s lawyer of 12 to 18 months, and ordered him to pay $392.2 million in restitution and forfeitures.