Lying hedge fund boss Alberto Micalizzi fined £3m

 

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.

PA

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Day In a Page

Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate