Articles Tagged with Platinum Partners

AdobeStock_49363801-1-300x200Recently a client called us and asked if his investment firm that sold him Platinum Partners related investments might be liable for the losses sustained.  The simple answer is possibly, yes.  Many registered investment advisors (RIAs) heavily sold Platinum Partners to clients.  The resulting losses have been devastating.  Fortunately for these victims, RIA’s have very specific, detailed duties to clients, including a fiduciary duty.  In 1963, the U.S. Supreme Court ruled that Section 206 of the Investment Advisers Act imposes a fiduciary duty on RIAs. Securities Exchange Commission v. Capital Gains Research Bureau, Inc., 375 U.S. 180 (1963), was the Supreme Court’s first interpretation of the Investment Advisers Act. To this day, the case is cited frequently by lower courts and the SEC in enforcement actions.

A fiduciary obligation is one that goes beyond the suitability standard typically owed by registered representatives of broker-dealer firms to their clients. The relationship between an RIA and the firm’s clients is built on the premise that the investment advisor will always do the right thing for the person or entity receiving advice. It is a special relationship that does not exist between most businesses providing services to their customers. In June of 2009, a group of investment industry leaders formed The Committee for the Fiduciary Standard and called on Congress to adopt an authentic fiduciary standard. This committee put forth a list of five core principles of the fiduciary standard to help individual investors make the distinction between an investment advisor’s fiduciary standard and a broker’s suitability standard (Figure 8-1).  These include:

Put the client’s best interest first

AdobeStock_123495998-1-300x197Did you lose money with Platinum Partners Credit Opportunity Fund or with one of its hedge funds? If so, please call 312-332-4200 today to speak to an attorney for a no-cost, no-obligation assessment of your legal options. We are securities attorneys based in Chicago and Barrington, Illinois who recover money for investors on a contingency fee basis only. We do so in the Financial Industry Regulatory Authority (FINRA) arbitration forum. We may be able to help you recover your losses with Platinum Partners. If your broker or brokerage firm sold you Platinum Partners, you may be entitled to recover money because these were unsuitable, highly risky and illiquid investments. Many brokerage firms may have sold Platinum Partners or received selling compensation or fees because of the sale of these securities and these include:

Palladium Capital Advisors LLC

Monarch Bay Securities LLC

The attorneys at Stoltmann Law Offices are interested in speaking to those individuals who may have invested with Platinum Partners. Recently, the founder of the hedge fund, along with six others were arrested early on Monday after defrauding investors in a ponzi scheme. Founder and Chief Investment Officer Mark Nordlicht, co-chief investment officer David Levy and former president Uri Landesman were all charged with counts of securities fraud, investment adviser fraud and conspiracy. Allegedly, the men, along with others, erroneously inflated the value of Platinum’s assets, allowing the firm to collect a hefty cut of all investment gains and to project a veneer of financial stability. In reality, the firm’s investments were worth less, and the executives knowingly faked the performance figures. Earlier in the year, the fund planned to liquidate its hedge funds, but its flagship fund filed for bankruptcy protection. Murray H. Huberfeld was arrested this year in connection with an alleged scheme to bribe a union leader to funnel $20 million to Platinum. Please call our securities law offices in Chicago today to speak to one of our attorneys for free. We may be able to help you recover your losses in the arbitration forum on a contingency fee basis.

According to a recent Wall Street Journal article, a federal judge has frozen the $118 million assets of Platinum Partners, the hedge fund manager which is the subject of a federal fraud investigation after a bankruptcy trustee sued the company. The judge ordered a temporary restraining order on Wednesday barring transfers from certain bank accounts belonging to Platinum hedge funds and investment vehicles. The trustee sued Platinum for $200 million on Wednesday, alleging that insiders at Platinum’s flagship fund engaged in a scheme to “plunder” Black Elk Energy Offshore Operations by siphoning the proceeds from the sale of its prime assets before the company went bankrupt. The judge said that this reflected a pattern of “fraud and abuse” by the company. The company’s scheme was engineered by its executives: Mark Nordlicht and David Levy. They took the sale proceeds with the help of a company called Beechwood Bermuda International Ltd., which was allegedly controlled by Platinum. Platinum used Beechwood to use bondholders to authorize the transaction with a false vote. Black Elk collapsed after criminal charges surfaced in connection with an off-coast explosion that killed three workers. Black Elk pleaded not guilty to the criminal charges and the litigation is pending. Platinum has pleaded not guilty to conspiracy and wire fraud in connection with an alleged bribe of a union official for investments.

Stoltmann Law Offices is interested in speaking to those investors who may have invested in Platinum Partners LP and its flagship hedge funds, the Platinum Partners Value Arbitrage Fund and the Platinum Partners Credit Opportunities Fund. These funds may have defrauded investors. We are investigating whether Platinum Partners paid investors who redeemed their hedge fund positions before June 2016 with money gained from newly incoming investors. This may have been a ponzi scheme. Platinum may have misstated the value of its investments, for which there was no public market price, and whether Platinum executives, including Murry Huberfeld, Mark Nordlicht, and others, may have assisted in any wrongdoing that caused harm to Platinum investors. Platinum Partners announced its liquidation of its two hedge funds in a July 20, 2016 letter to investors. The fund also suspended any redemption by investors. The Securities and Exchange Commission (SEC) and the Department of Justice are both investigating Platinum Partners for bribery and fraud. The Federal Bureau of Investigation raided Platinum Partners offices and Huberfeld was arrested for bribing union officials to invest in the fund.

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