Saturday, 28 February 2015
Last updated 17 hours ago
Apr 2 2009 | 10:18am ET
Seven hedge funds say they lost more than $400 million investing with accused fraudster Marc Dreier, who is accused of ripping off investors to the tune of more than $700 million.
Fortress Investment Group, which was at the December meeting in Toronto where Dreier was arrested, filed a claim in the bankruptcy case of Dreier’s law firm, Dreier LLP, saying it lost $125.7 million in the alleged scheme, Bloomberg reports. Dreier is accused of selling phony discount notes he claimed were issued by prominent New York developed Solow Realty & Development.
According to Fortess, Dreier had diversified his scheme by the time of his arrest: At the Toronto meeting, he was trying to sell them phony notes from BCE, Canada’s largest telephone company, according to court filings.
Seven of the 13 hedge funds authorities say were victimized by Dreier have filed claims in the bankruptcy case this week. Elliott Management Corp. says it lost $101.1 million, while Eton Park Capital says it is out $46 million.
Also claiming losses were Perella Weinberg Partners ($46 million), Concordia Advisors ($22.3 million), Novator ($20 million) and Meyer Ventures ($13.4 million). Other hedge funds burned in the alleged scheme include the Blackstone Group’s GSO Capital Partners and the collapsed Amaranth Advisors.
Dreier has pleaded not guilty to criminal charges of conspiracy, securities fraud, wire fraud and money laundering. He remains in jail awaiting a June trial. The Securities and Exchange Commission has also sued Dreier, alleging he sold at least 85 forged notes between 2004 and last year.
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…