SEC charges Platinum Partners founder with allegedly running fraudulent scheme

By Mark Iandolo | Dec 29, 2016

WASHINGTON (Legal Newsline) - The Securities and Exchange Commission announced Dec. 19 charges against Mark Nordlicht, founder of Platinum Partners and two of its flagship hedge funds.

The SEC alleges Nordlicht oversaw a fraudulent scheme to inflate asset values and move investor money around to cover losses and liquidity issues.


“Nordlicht and others allegedly disregarded their fiduciary duties in systematic fashion and made it appear to investors that the funds were much more valuable and liquid than they actually were,” said Andrew M. Calamari, director of the SEC’s New York Regional Office.


According to the SEC, Nordlicht and the Platinum funds exaggerated an oil company’s value, concealed a major liquidity issue by transferring money between funds and misrepresented its assets to new investors it was trying to bring on board.


“As alleged in our complaint, investors were repeatedly presented a false picture of the performance of the Platinum funds and their overall liquidity situation,” said Andrew J. Ceresney, director of the SEC’s Division of Enforcement.

“As investors sought redemptions, the defendants engaged in numerous improper measures in an attempt to meet redemption requests, including taking out high-interest rate loans, commingling monies among funds and raising money from new investors through fraudulent misrepresentations.”

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