Judge sends tough signal on fraud

A jury found Magnus Peterson guilty earlier in the week

A judge yesterday handed down one of the toughest sentences of recent times for a white collar crime, giving the boss of the failed hedge fund Weavering 13 years in prison for a $537m (£358m) fraud.

Magnus Peterson, 51, will have to serve at least half of his sentence in jail, Mr Justice Smith said. Peterson’s legal team said they were considering an appeal.

A jury found Peterson guilty earlier in the week of eight counts of fraud, forgery and furnishing false information, in a case in which he was accused of artificially inflating the value of the fund’s investments, misleading investors into handing over their money.

The length of the sentence for the Swedish-born Peterson, of Otham, Kent, surprised many in the legal profession as it is so much higher than in most recent cases. The former UBS trader Kweku Adoboli only received seven years for his rogue trading.

The Serious Fraud Office trumpeted the sentence, with Jane de Lozey, its joint fraud head, saying: “The length of sentence handed down reflects the damaging and extended nature of Mr Peterson’s crime … That the SFO pursued this case demonstrates its determination to prosecute the topmost tier of complex economic crime.”

But investors who lost money in the fraud pointed out that the SFO had originally decided to drop the case in 2011. That decision was made just days after a Cayman Islands court ordered two Weavering directors to pay $111m in damages.

The SFO only reopened the case in 2012 after pressure from investors following their successful litigation against Peterson, his wife and two others in the High Court.