Platinum Partners, Seabrook and COBA – A Fraudulent Web

When an Insolvent Hedge Fund decides to Buy Back It’s Debt, something is a bit, Unkosher.

 

First Platinum Partners gets in bed with Norman Seabrook for an investment in the fund by the Corrections Officers’ Benevolent Association Fund (COBA). The investment was made possible by a serendipitous meeting between Jona Rechnitz and Norman Seabrook which potentially involved “sensitivity training courses” taken at the Simon Wiesthental Insitute.  Now Platinum Partners wants to buy back the investment (which lost money), while at the same time closing the fund (and repaying the investors)

. COBA loses money because the investment went south and now they are considering buying back the investment, even though Platinum may not be solvent.

 

Platinum Partners May Buy Out NYC Correction Officers’ Union Investment

Prosecutors allege Platinum executive bribed union president in exchange for $20 million investment

http://www.wsj.com/articles/platinum-partners-may-buy-out-nyc-correction-officers-union-investment-1467132111

Platinum Partners is considering buying out a $20 million investment from the New York City correction officers’ union, weeks after a former executive at the hedge fund and the union’s ex-president were charged in an alleged bribery scheme.
Discussions were continuing and could still fall apart, but if a deal is reached it could safeguard the union members’ pension money invested at the hedge fund.
Platinum founder Mark Nordlicht told investors in a call Tuesday that the buyout would be executed in tandem with an outside group and include the union’s unrealized investment gains.

“I really feel that their involvement at this time is disadvantaging all investors going forward,” Mr. Nordlicht said on the call, referring the union.

A spokesman for the Correction Officers’ Benevolent Association declined to comment.
Earlier this month, prosecutors from the U.S. attorney’s office in Manhattan alleged that a then-Platinum executive funneled $60,000 to an intermediary to bribe the then-president of the union for an investment.

Norman Seabrook, the union president at the time, has denied taking money. The former Platinum executive, Murray Huberfeld, hasn’t commented on the charges.
Federal Agents Arrest New York City Correction Union President Norman Seabrook (June 8)

Murray Huberfeld’s Hedge-Fund Firm Has History of Big Risks (June 8)
A Day After His Arrest, Norman Seabrook Is Out as Correction Union Boss (June 9)
Correction Union’s Chief to Members: ‘Your Money is Safe’ (June 16)
Businessman Helped Steer $10 Million of Union Money to Hedge Fund (April 14)

The charges grew out of a wide-ranging federal investigation into corruption at the New York Police Department, a probe that has also focused on New York City Mayor Bill de Blasio’s fundraising. Mr. de Blasio, a Democrat, has said he and his aides have abided by campaign-finance laws.

Platinum faces its own legal issues. Last week, agents from the Federal Bureau of Investigation raided the firm’s New York offices in connection to a separate probe of the firm’s business by the U.S. attorney’s office in Brooklyn, a person familiar with the matter said.

Mr. Nordlicht said on the call that while he was “surprised and disappointed” by the raid and other “unfair scrutiny,” the firm would be cooperative with government authorities.
Spokespeople for the U.S. attorneys offices declined to comment.

Less than a week after Messrs. Seabrook and Huberfeld were arrested, Platinum announced plans to close its main fund, where the union’s money went.
Since then, Mr. Seabrook’s successor as head of the union has sought to ease members’ concerns about the group’s finances. “I want to assure you that your money is safe,” Elias Husamudeen wrote in bold and capital letters in a three-page letter mailed to union members that was reviewed by The Wall Street Journal.

On the call Tuesday, Mr. Nordlicht said his firm, with about $1.2 billion under management, is in no rush to sell its investments and pay back investors overall.
He said Platinum plans to spend the rest of the year reducing its debt, among other measures, and begin returning some money to its backers in 2017. He didn’t specify when all of the money would be returned.

“To the extent we got into liquidity issues,” said Mr. Nordlicht, referring to the firm’s suspension of redemptions in its main fund, “it’s because we don’t give up on positions.”
Platinum plans to unwind that fund. Final plans for a second, smaller vehicle have yet to be determined.

In the meantime, the firm will stop charging its investors a set management fee and cease providing regular estimates of investment performance.
As for the future of the investigations, at least as it relates to the Brooklyn attorney’s office, Mr. Nordlicht said on the call, “Frankly, I have to tell you, 100% honestly, we have no clue.”

 

 

http://www.crainsnewyork.com/article/20160629/MORNING10/160629823/trumps-tax-break-espaillat-declares-victory-platinum-partners-union-buyout

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