Lying hedge fund boss Alberto Micalizzi fined £3m
Tuesday 29 May 2012
A hedge fund boss who is
accused of covering up losses of 390 million US dollars (£250 million)
was facing a record £3 million fine from the City watchdog today.
The Financial Services Authority (FSA) said Alberto Micalizzi, chief executive of Dynamic Decisions Capital Management (DDCM), lied to investors by concealing the true value of his company's master fund. He will dispute the claims at a tribunal.
Despite the "catastrophic" losses, the FSA said Micalizzi, who has a PhD in finance from Imperial College London, continued to court new investors, including one who put up 41.8 million US dollars (£27 million).
When the fund went bust, the liquidator estimated that it was worth around 10 million US dollars (£6.3 million).
Tracey McDermott, the FSA's acting director of enforcement and financial crime, said: "Alberto Micalizzi's conduct fell woefully short of the standards that investors should expect and behaviour like his has no place in the financial services industry."
As well as being landed with a fine, which is the largest penalty issued by the FSA for an individual not involved in market abuse, DDCM has banned from continuing operations.
Italian Micalizzi, who was a professor of finance at Bocconi University in Milan, founded investment management firm DDCM in 2004 and worked out of offices in South Kensington, London.
The losses incurred by the company's master fund between October 1 2008 and December 31 2008 were around 85% of the fund's total value, the FSA said.
Micalizzi entered into a number of contracts, for the purchase and resale of a type of bond, knowing the bond was not a genuine financial instrument, the regulator said.
The fund was placed into liquidation in May 2009 and to date no payment has been made to any investor by the liquidator.
Ms McDermott added: "Those managing investments are in positions of trust and significant responsibility.
"Although investing in hedge funds can carry greater risk than many other asset classes, investors in funds controlled by regulated hedge fund managers are entitled to be treated with exactly the same honesty and integrity as other firms."
The tribunal is expected to be heard early next year.
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
North Korean defector flees to Finland 'with evidence of chemical testing on humans'
Isis schoolgirl Amira Abase who fled London to join terrorists in Syria mocks victims of Tunisia massacre
Father faces deportation to Thailand after 27 years in Britain for two 'stupid crimes'
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
- 1 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 2 What supermodels really think about posing in the nude
- 3 People all over the world are getting semicolon tattoos to draw attention to mental health
- 5 Chris Moyles reportedly set to make radio comeback with new breakfast show on XFM