Weavering chief is charged with fraud and forgery
Saturday 15 December 2012
The man behind failed hedge fund Weavering Capital has been charged with fraud, forgery and false accounting in the lead-up to the company's collapse in 2009.
Magnus Peterson, a 49-year-old Swedish national, will appear before Westminster magistrates' court on 7 January in the latest twist of a long-running scandal, which resulted in heavy losses for investors such as charities and pension funds during the financial crisis.
Weavering Capital collapsed after it became clear that the hedge fund's main assets were over $600m (£372m) in interest-rate swaps with an offshore company controlled by Mr Peterson.
At the time, investors queued up to withdraw their money from the company but their redemptions could not be funded.
The SFO dropped its initial investigation into Weavering's collapse last year due to insufficient evidence but was threatened with a judicial review by the hedge fund's creditors if it did not re-examine the file.
In July, it eventually bowed to external pressure and re-opened the case after the High Court ordered directors at the company to pay $450m in damages.
During the civil hearing in London, Mrs Justice Proudman ruled that Mr Peterson, who represented himself throughout the case, may have committed the fraud "out of a sense of invincibility, self-belief, and a gambler's mentality".
Three other directors at the firm – Edward Platt, Charanpreet Dabhia and Mr Peterson's wife Amanda – were found guilty of negligently permitting fraud to happen.
The three, with Mr Peterson, were found jointly and severally liable.
David Green, the SFO's new director, was lauded for performing a U-turn and re-opening the Weavering investigation.
Mr Green has also bared his teeth against Britain's banks over the Libor rigging scandal.
Earlier this week, the SFO along with City of London police carried out searches at two homes in Essex and one in Surrey. Three British men, aged 33, 41 and 47, were arrested and taken to the City of London police station for questioning in connection with the ongoing investigation into Libor manipulation.
The SFO has devoted at least 40 staff to the investigation over the past few months.
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