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
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
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.”