Exclusive: Bribe Suspect Huberfeld Accused of Stiffing Previous Platinum Investors
The Observer can now report for the first time on a related Jewish-world scandal involving Huberfeld that reveals the depth of financial pressure the hedge funder was under. That pressure just might have led to the accusation Huberfeld faces of bribing Correction Officers Benevolent Association head Norman Seabrook in an effort to fund withdrawals being made from his flailing fund.
The Observer has exclusively learned that two prominent Jewish investors have gone to the SEC to report Huberfeld for non-payment of redemptions. The Fruchthandler family, real estate moguls whose holdings include the Woolworth Building, and the founder of one of the oldest and most well-respected Brooklyn yeshivas, Yeshiva Rabbi Chaim Berlin Fund, reported Huberfeld & Platinum to the SEC for non-payment of over $600,000 in redemptions dating back to 2014.
In a letter obtained by the Observer and dated November 4, 2015, counsel for the Fruchthandler Foundation and the Yeshiva Rabbi Chaim Berlin Fund wrote they would “file a complaint with the SEC’s Divisions of Dnforcement [sic] and Investment Management in Washington, D.C., requesting they commence an immediate investigation into your dilatory practices, and (ii) refer the matter to our legal counsel for appropriate action.”
The letter was sent just weeks after a run of good press for the fund seemed to suggest Platinum would have plenty of money to cover redemptions. On October 21, Bloomberg wrote a valentine to the fund headlined “No Blow Up Is Big Enough to Tarnish Platinum Partners’ Returns” and crediting Huberfeld’s strategy of investing in “payday lenders, Singaporean penny stocks” for its better-than-Madoff growth of “17 percent annually for 13 years.” The Bloomberg article touts the acumen of Huberfeld and co-founder David Bodner, despite the pair having both been sanctioned at least twice. They admitted to misdemeanors in 1992 for a Chris Moltisanti-like scheme to have others take their brokerage-licensing tests for them in 1992, and then in 1998 paid a $4.7 million fine for illegally selling restricted stock. Still, the October Bloomberg article finds writer Zeke Faux showering praise upon their fund, calling it “on a par with the world’s best-performing hedge funds, such as Bill Ackman’s Pershing Square Capital Management and Israel Englander’s Millennium Management.”