Anger as SFO drops its probe into hedge fund
INVESTORS and liquidators have reacted with shock after the Serious Fraud Office dropped a two-and-a-half-year probe into a hedge fund that collapsed with $639m (£399.86m) under management.
The SFO said there was “not a reasonable prospect of conviction” after studying evidence on London-based Weavering Capital (UK), which went into administration in 2009.
The move comes days after a Cayman Islands court ruled in a civil case between the fund’s liquidators and two directors that Weavering’s fund manager Magnus Peterson had committed fraud and that the fund had made “fictitious” transactions to inflate assets and conceal losses.
It also comes ahead of legal action being taken in the UK by the liquidators against Peterson and other Weavering directors and employees.
Geoffrey Bouchier, one of the liquidators, yesterday described the SFO’s decision as “deeply disappointing”. Peterson could not be contacted but said in a statement that the allegations against him were “groundless” and that he intends to appeal the Cayman ruling. Last month a Cayman court awarded damages of $111m against fund directors Stefan Peterson and Hans Ekstrom.