Weavering hedge fund boss Ulf Magnus Michael Peterson guilty of fraud

Peterson will be sentenced at Southwark Crown Court on Friday

The founder of one of London’s best-known hedge funds has been found guilty of a $536m (£354m) fraud following a three-month trial at Southwark Crown Court.

Ulf Magnus Michael Peterson, a 51-year-old Swedish national, made his name in the City as an interest rate and foreign exchange trader before setting up Weavering Capital in 1998. The company reportedly had about $640m under management a decade later, yet its flagship Weavering Macro Fixed Income fund collapsed in 2009, having been swamped with investors trying to pull out money in the wake of the Lehman Brothers’ collapse.

Peterson was yesterday found guilty of eight counts of fraud, forgery, false accounting and fraudulent trading. Britain’s Serious Fraud Office said he used illegal trades to artificially inflate the Macro Fund’s investment performance and “thereby mislead investors as to its true value”.

The SFO said that over a six-year period, investors were misled into putting $780m into the Macro Fund, which was marketed as a low risk and liquid fund, primarily engaged in exchange trading. However, when investors began asking for their money back in December 2008, there was no money to give back.

Peterson will be sentenced at Southwark Crown Court on Friday, and has been remanded in custody until then. Investors are believed to have lost about $536m, according to the SFO.

David Green, director of the SFO, thanked “all those who assisted us with this highly complex international investigation, including investors, auditors, liquidators, the Irish Stock Exchange, City of London Police and overseas law enforcement authorities.

“Mr Peterson rewarded himself handsomely from investors’ monies, to the value of £5.8m between 2005 and 2009,” Mr Green said. “While Mr Peterson knew full well what the true value of the fund was when it collapsed, his investors did not.”