Wed, Aug 27, 2014
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. Study shows what resonates with investors: 'Unwavering', 'passionate' beats 'committed', 'dedicated' and more surprises[more]

    Komfie Manalo, Opalesque Asia: A new study by Pershing Square, a unit of BNY Mellon company, showed that an effective value proposition strengthens audience connections and fosters growth, yet many advisors have had little objective guidance in formulating such statements until now. In the

  2. Hedge fund assets decline in July - eVestment[more]

    Bailey McCann, Opalesque New York: Total assets in hedge funds declined in July and dropped 0.49%, marking the industry's second monthly asset decline in 2014, according to the latest asset flows data from eVestment. Despite the asset decline, total industry AUM remained above the $3 trillion

  3. AIMA makes 'the case for hedge funds'[more]

    Bailey McCann, Opalesque New York: The Alternative Investment Management Association (AIMA), the global hedge fund industry body,

  4. Managed futures' global diversification is important in next phase of economic recovery[more]

    Komfie Manalo, Opalesque Asia: The global diversification provided by managed futures may prove to be extremely valuable as the markets enter the next phase of the economic recovery, said Campbell & Company, a pioneer in absolute return invest

  5. Ex-UBS prop trader's hedge fund Manikay Partners eyes UK launch[more]

    From eFinancialnews.com: Manikay Partners, a $1.7 billion US multi-strategy hedge fund set up in 2008 by a proprietary trader from UBS with backing from Goldman Sachs, is planning to open in the UK. New York-based Manikay's move into Europe comes after Financial News revealed on Monday that Aurelius