Petters-Linked Hedge Fund Manager Pleads Guilty

Oct 8 2009 | 1:21am ET

As expected, the hedge fund manager implicated in Thomas Petters’ alleged Ponzi scheme pleaded guilty to fraud yesterday.

Gregory Bell, the founded of Illinois-based Lancelot Investment Management, pleaded guilty to one count of mail fraud in St. Paul, Minn., federal court. He admitted helping Petters engineer a series of fraudulent transactions designed to hide losses from investors and keep his Ponzi scheme going.

Bell faces up to 20 years in prison and a $250,000 fine, but he is believed to be cooperating with prosecutors.

According to the Securities and Exchange Commission, which has filed separate civil charges against Lancelot and Bell, the hedge fund steered nearly all of the money it raised—some $2 billion—to Petters’ alleged $3 billion Ponzi scheme. When that fraud began to unravel last year, the SEC says Bell and Petters cooked up a series of bogus payments to cover up Petters’ delinquency on more than $130 million in allegedly phony notes sold by Petters to Lancelot.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.