Black Elk’s “Rigged” Bond Vote – Orchestrated by Mark Nordlicht and David Levy, the Details

Ex-Black Elk Atty Gives ‘Painful’ Detail On Bond Vote

Law360 (May 31, 2019, 9:44 PM EDT) — A former attorney for defunct energy firm Black Elk walked jurors through a bond vote that the government alleges former executives at Platinum Partners rigged in their favor, with the prosecutor on the case getting into a level of detail that a judge called “painful” on Friday.

Former Black Elk outside counsel W. Robert Shearer gave a second day of direct testimony at the trial where Platinum co-founder Mark Nordlicht and former Platinum co-chief investment officer David Levy are accused of working with others to secretly control the bulk of $150 million in Black Elk bonds ahead of a vote in order to direct millions back to Platinum itself.

Now a partner at Akin Gump Strauss Hauer & Feld LLP, Shearer was at the time at BakerHostetler. While jurors had heard of Nordlicht’s involvement the day before, Friday’s direct testimony was centered mostly on email interactions between Shearer, former Platinum managing director Daniel Small and former Black Elk CEO Jeffrey Shulse. Shulse and Small are scheduled to be tried separately on related charges. The government has not accused Shearer of wrongdoing.

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A Platinum Response – Fear Would Prevent Reporting, The Nordlicht Hedge

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Law360, New York (May 28, 2019, 8:15 PM EDT) — A former chief financial officer for Platinum Partners on Tuesday told a New York federal jury that Platinum co-founder Mark Nordlicht told him that “mutually assured destruction” would keep aggrieved investors from ratting the hedge fund manager out to regulators, despite Platinum’s inability to make timely repayments.

Daniel Mandelbaum, who was Platinum’s CFO for about 9 1/2 months in 2014 and 2015, said he spoke to Nordlicht amid a liquidity crisis that year at Platinum’s signature fund, Platinum Partners Value Arbitrage Fund.

Mandelbaum testified that he was protesting Platinum’s practice of preferentially repaying certain investors — including insiders and those with large stakes in PPVA — ahead of other investors who had outstanding redemption requests.

Nordlicht, however, told Mandelbaum at a meeting in Nordlicht’s office that investors wouldn’t complain to the Securities and Exchange Commission, since if the regulator got involved, PPVA would be shut down and its assets sold at fire sale prices, Mandelbaum testified.

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And the Very Platinum Truth Comes Out [Law360]

Ex-Platinum CFO Troubled By Business Methods, Jury Hears

Law360, New York (May 23, 2019, 8:38 PM EDT) — A former chief financial officer of Platinum Partners on Thursday told a New York federal jury weighing the fate of the hedge fund manager’s former top executives of his unease with the company’s problematic business practices and lack of cash to fund operations and pay back investors.

Daniel Mandelbaum, 42, took the witness stand in the late afternoon in the monthlong trial of Platinum founder Mark Nordlicht, former co-chief investment officer David Levy and ex-chief financial officer Joseph SanFilippo, who stand accused of defrauding investors.

Mandelbaum, who said he worked at Platinum for a scant 9 1/2 months, testified of how he became “very uncomfortable” with Platinum’s way of doing business after taking the CFO job in late 2014 at the urging of his friend and Platinum chief operating officer Naftali Manela, who pled guilty in 2016.

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ADDITIONAL INFORMATION:
Re: The hiring by Platinum of Daniel Mandelbaum was highly regarded and announced:

NEW YORK–(BUSINESS WIRE)–Platinum Partners, a New York-based hedge fund adviser, is pleased to announce the appointment of Daniel Mandelbaum to the role of Chief Financial Officer. Bringing with him sixteen years of hedge fund experience, Mr. Mandelbaum is responsible for overseeing the firm’s financial and reporting functions.

“We are delighted that Daniel has joined Platinum, adding technical operations knowledge that will both enhance and strengthen the firm’s financial infrastructure”

Tweet this“We are delighted that Daniel has joined Platinum, adding technical operations knowledge that will both enhance and strengthen the firm’s financial infrastructure,” said Mark Nordlicht, Chairman and Co-Chief Investment Officer of Platinum Partners. “His appointment is indicative of our commitment to maintaining a superior leadership team in order to meet the evolving needs of our investors.”

Prior to joining Platinum Partners, Mr. Mandelbaum served as Chief Financial Officer and Chief Operating Officer for Royal Capital Management, LLC, a New York City-based fundamental long/short equity firm, where he worked for thirteen years. During his tenure he was responsible for overseeing all business development as well as financial, tax, operational and compliance issues.

Mr. Mandelbaum is a Certified Public Accountant, and began his career in Capital Markets group for PricewaterhouseCoopers where he focused primarily on auditing hedge funds.

About Platinum Partners

Platinum Partners (the “Firm”) is a New York based investment management group with more than $1 Billion in assets under management. The Firm was founded in 2003 by Mark Nordlicht, an investor with over twenty years of experience in the asset management space.

Contacts

For Platinum Partners:
Cary Ruterman, 212-279-3115 ext. 123
cruterman@prosek.com