Magnus Petersen sentenced to 13 years in prison

By 26th January 2015General News

On 23rd January 2015 the former head of the collapsed hedge fund Weavering Macro Fixed Income Fund Ltd was sentenced to a total of 13 years in prison, having been found guilty of eight counts of fraud, forgery, false accounting and fraudulent trading.

Mr Justice Smith commented:

“You knew the risks that cheating entailed for investors …It was entirely foreseeable that investors would lose huge amounts. Sophisticated dishonesty on this scale calls for the maximum sentence possible.”

According to the SFO website over a six year period investors were misled into putting US$780m into the Macro Fund, which was marketed as a low risk and liquid fund primarily engaged in exchange trading. When investors began asking for their money back in December 2008 following the worldwide financial crisis, there were no real assets to fund any repayments. Unable to pay back investors, the Macro Fund ceased trading on the Irish Stock Exchange in March 2009 and liquidators were appointed. The net losses to the investors were approximately US$536m.

This is one of the first hedge fund prosecutions of its kind to arise out of the 2008 financial crisis

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