Geoff Bouchier 1, Criminals – 0

Magnus Peterson, founder of the failed hedge fund Weavering Capital, is unlikely to get much enjoyment out of the upcoming Christmas holidays: on Friday he was charged with numerous financial services offences relating to the hundreds of millions of pounds that investors lost when the fund collapsed in March 2009. His trial starts on January 7; if found guilty, he could spend many years in jail.

 

 

Yet, this time last year, Peterson thought he’d got away with it, as the Serious Fraud office had dropped the case. According to the Daily Mail (http://www.dailymail.co.uk/news/article-2248239/Founder-370m-collapsed-hedge-fund-charged-raft-fraud-charges.html) the SFO is presenting its decision last July to re-open the investigation as evidence of a new Director, David Green, taking a harder line. We hope this is the truth; if so, it bodes well for investors in the Connaught Income Fund Series 1 who want to see those who took their money brought to book.

 

 

Whether or not there’s substance to the SFO’s spin, we have another reason for cautious optimism. We hear on the grapevine that a major factor in the reopening of the Weavering Capital case was diligent investigatory work into cross-border money transfers and other matters and lobbying of the SFO undertaken by the firm’s insolvency practitioner and his team. Moreover, that same IP won a $450m civil case against Peterson, his wife and two senior Weavering directors last May.

 

 

While we wish that the FSA and the Police in the UK took it upon themselves to investigate financial services crimes, rather than leaving it to the most able and honest members of the insolvency profession to do the work (funded from money that ought to be going to creditors), we’re relieved to note that the insolvency practitioner who pursued Peterson and his cronies so diligently is none other than Geoff Bouchier of Duff and Phelps.

 

 

We hope that certain individuals at Connaught and Tiuta who read this news will have their Christmases thoroughly ruined by what they’ve just learned. Someone smart is on their case. We suspect there are more former employees and others who either knew what was going on at the time but didn’t benefit from it or who were unaware but, with the benefit of hindsight, have information that could be helpful to the investigation. We think they will enjoy their Christmases much more once they’ve unburdened themselves of what they know. If you’d like to talk to us in confidence, please email connaughactiongroup@gmail.com in the first instance.