Thu, Dec 8, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Four hedge fund traders indicted in Black Diamond Capital Solutions Ponzi scheme

Friday, February 24, 2012

Bailey McCann, Opalesque New York: Four mid-West-based hedge fund traders were indicted by a federal grand jury for charges that they created a $40m ponzi scheme according to a statement from the Federal Bureau of Investigation (FBI).

The indicted defendants are Jonathan D. Davey, Jeffrey M. Toft, Chad A. Sloat and Michael J. Murphy. They face charges for operating fake hedge funds under the name Black Diamond Capital Solutions (Black Diamond) – not to be confused with Black Diamond Capital Management, LLC, a U.S.-based alternative asset management firm with $10bn+ in AuM.

According to the indictment, from 2007-2010 the defendants told investors that they had done due diligence on Black Diamond and that it was a low risk hedge fund. Eventually, the fake fund started to collapse and a second Ponzi account was created managed by Jonathan Davey which Davey used to pay off investors and fund his and the defendants’ lifestyles.

Davey is also being charged with tax evasion for claiming that investor money claimed on his tax returns was a loan. The money was used to build Davey’s mansion. The defendants face up to 30 years in prison and hundreds of thousands of dollars in fines if convicted. They will make their first court appearance soon.

Other convictions have already taken place around Black Diamond. On December 16, 2010, ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. M&A - AllianzGI to acquire Sound Harbor Partners, SS&C completes acquisition of Wells Fargo's Global Fund Services business[more]

    AllianzGI to acquire Sound Harbor Partners Allianz Global Investors (AllianzGI), an active investment manager, announced that Sound Harbor Partners, a US private credit manager led by Michael Zupon and Dean Criares, have agreed to join its fast-growing Private Debt Platform. Under the te

  2. Hunt for yield pushes more investors into riskier assets[more]

    From FT.com: Pension funds and insurance companies have increasingly embraced riskier assets in their hunt for higher returns over the past five years. Alternative assets such as property, infrastructure, private equity and hedge funds have been bought up by institutional investors in a world where

  3. People - Nectar Financial hires senior investment team, Texas A&M replaces retiring foundation investment chief, Ex-Cadwalader partner Woolery makes another sudden exit, How to become a Python coder at a top hedge fund, by the co-CTO of Man AHL[more]

    Nectar Financial hires senior investment team Nectar Financial AG, a Swiss financial technology company for wealth and asset management, has announced that it has hired two key senior leaders to spearhead its digital asset management efforts. The company also announced that it has entere

  4. Activist News - Cognizant has introductory discussion with activist investor Elliott; to review letter, Starboard Value makes huge investment in Hewlett Packard, Hedge fund calls for removal of First NBC Bank CEO[more]

    Cognizant has introductory discussion with activist investor Elliott; to review letter From Indiatimes.com: Cognizant said it had an introductory discussion with Elliott Management after receiving the activist hedge fund's letter asking for a board shakeup, a buyback, a dividend and chan

  5. Opalesque Exclusive: Ireland relaxes treatment of direct lending funds[more]

    Bailey McCann, Opalesque New York: The Irish Central Bank has relaxed its treatment of direct lending funds, according to a recently released