We Diagrammed the Links Weeks Ago….
I seem to recall us posting articles detailing the links between Platinum and Rothstein several weeks ago in a few different articles. We even drew a diagram as intertwined, however, as the schemes themselves. Unfortunately, we are not credited with the following story, but if you have been reading our Platinum postings, you read about the below links before now… Keep following, more to come…
Platinum Partners, the hedge fund at the center of an alleged New York City municipal union kickback scandal, has a history that’s sordid even for Wall Street — with alleged ties to one of the largest Ponzi schemes in history, and a confusing trail of documents that raise more questions than answers, The Post has learned.
Murray Huberfeld and Mark Nordlicht, two top executives of the $1.3 billion fund, allegedly enlisted other hedgies and their wives to invest in a feeder fund for Scott Rothstein, a trustee lawsuit claimed.
Rothstein was convicted of running a Florida Ponzi scheme and is now serving 50 years for racketeering and securities fraud, according to court documents.
Rothstein scammed investors by getting them to bankroll fake lawsuits for litigants who couldn’t afford to pay for their own litigation, with the promise of repaying those investors with settlement money, which turned out to be fake, court documents show.
It ran from 2005 to 2009, and ballooned to $1.2 billion in part because of the investments made by Huberfeld and Nordlicht, according to the suit.
A group of hedgies and their wives were accused in a civil suit brought by the trustee in charge of unwinding Rothstein’s scam of knowing ahead of time that they were funding a Ponzi scheme — a claim they deny. The civil suit was settled in 2012 for $38 million.
Platinum came into the public eye through the charges brought against Norman Seabrook, the ex-head of the NYC correction officer’s union, who pleaded not guilty on Friday to allegedly taking a $60,000 bribe for a $20 million investment in Platinum. Huberfeld has also pleaded not guilty. Nordlicht has not been charged.
Platinum is now in the process of liquidating all three of its funds, Montieth Illingworth, a spokesman for Platinum, told The Post.
Like Rothstein’s fund, Platinum invests in hard-to-value assets, like life settlement policies.
Because its assets are so esoteric, investors were almost entirely dependent on Platinum to say how much they were worth. In one report obtained by The Post, the fund showed gains in 119 out of 120 months in its main credit fund.
Illingworth told The Post that the fund used an “industry standard” metric to value its assets, but declined to describe it, or who developed those metrics.
He added that a valuation committee, which included Nordlicht, met monthly.
The company’s auditor, CohnReznick, didn’t return a call seeking comment.
To read the article in its entirety click, here.