8 Sep 2011
By Bill McIntosh
Britain’s Serious Fraud Office has discontinued its investigation into the collapse of Weavering Capital (UK) Ltd, a London-based hedge fund managed by Magnus Peterson, which went into liquidation in early 2009, leaving investors nursing losses of over $500 million.
Peterson and Edward Platt, a senior employee of Weavering Capital, were arrested in 2009. The failure of the SFO’s investigation follows an Aug 26 landmark judgment in a Cayman Islands court where Peterson's brother and stepfather were found liable for damages of $111 million for neglecting their duties as fund directors.
"The SFO's decision to discontinue its investigation into the actions of Magnus Peterson and Edward Platt comes as a shock and is deeply disappointing to Weavering's investors and creditors," said Geoffrey Bouchier, who with Paul Clark of MCR are Joint Liquidators of Weavering Capital (UK) Limited. Law firm Jones Day advised MCR and is also leading a civil case against Peterson and other Weavering staff, which is set to begin in the UK High Court on Oct 10.
Weavering went into liquidation in March 2009 after it was discovered that the chief asset of its flagship fund, Weavering Macro Fixed Income Fund, was $637m in swaps trades with an offshore company controlled by Peterson. The swaps were worth only a small fraction of that amount.
"The SFO’s decision is particularly surprising given the weight of evidence, the proximity of the civil trial and the fact that, in related proceedings, a Cayman Islands judge has already found that Mr Peterson defrauded Weavering's investors,” said Jones Day partner Barnaby Stueck, who is leading the civil case. “It has caused investors to raise serious questions about the ability and will of British prosecuting authorities to bring criminal charges in substantial fraud cases, which can only be damaging to the City's position as a centre of international finance.”
Though the SFO has ended its investigation, Peterson and others could yet face UK criminal charges. Stueck, for his part, added: “Despite the SFO's stance, Weavering's investors intend to do everything possible to ensure a criminal prosecution takes place.”
The SFO couldn’t be reached for comment. Reports suggest that the SFO suspended the investigation on the basis that it saw little likelihood of being able to secure a conviction.
Britain’s Serious Fraud Office has discontinued its investigation into the collapse of Weavering Capital (UK) Ltd, a London-based hedge fund managed by Magnus Peterson, which went into liquidation in early 2009, leaving investors nursing losses of over $500 million.
Peterson and Edward Platt, a senior employee of Weavering Capital, were arrested in 2009. The failure of the SFO’s investigation follows an Aug 26 landmark judgment in a Cayman Islands court where Peterson's brother and stepfather were found liable for damages of $111 million for neglecting their duties as fund directors.
"The SFO's decision to discontinue its investigation into the actions of Magnus Peterson and Edward Platt comes as a shock and is deeply disappointing to Weavering's investors and creditors," said Geoffrey Bouchier, who with Paul Clark of MCR are Joint Liquidators of Weavering Capital (UK) Limited. Law firm Jones Day advised MCR and is also leading a civil case against Peterson and other Weavering staff, which is set to begin in the UK High Court on Oct 10.
Weavering went into liquidation in March 2009 after it was discovered that the chief asset of its flagship fund, Weavering Macro Fixed Income Fund, was $637m in swaps trades with an offshore company controlled by Peterson. The swaps were worth only a small fraction of that amount.
"The SFO’s decision is particularly surprising given the weight of evidence, the proximity of the civil trial and the fact that, in related proceedings, a Cayman Islands judge has already found that Mr Peterson defrauded Weavering's investors,” said Jones Day partner Barnaby Stueck, who is leading the civil case. “It has caused investors to raise serious questions about the ability and will of British prosecuting authorities to bring criminal charges in substantial fraud cases, which can only be damaging to the City's position as a centre of international finance.”
Though the SFO has ended its investigation, Peterson and others could yet face UK criminal charges. Stueck, for his part, added: “Despite the SFO's stance, Weavering's investors intend to do everything possible to ensure a criminal prosecution takes place.”
The SFO couldn’t be reached for comment. Reports suggest that the SFO suspended the investigation on the basis that it saw little likelihood of being able to secure a conviction.
