Weavering Founder Appears in Court Over Hedge Funds Collapse

Weavering Capital (UK) Ltd. founding director Magnus Peterson appeared in a London court today facing six charges of fraud, forgery, fraudulent trading and false accounting over the collapse of the hedge fund in 2009.

Judge Michael Snow ordered Peterson, 49, to appear at a higher criminal court in 12 weeks and surrender his passport to the Serious Fraud Office within seven days.

The defunct fund had about $640 million under management in late 2008 before discovering the counterparty for its biggest trading position was controlled by the fund’s manager.

Prosecutors at the SFO dropped their initial criminal probe into Peterson over concerns it wouldn’t win a conviction. The SFO reopened the case in July after the agency appointed a new director.

If convicted of fraud Peterson, a Swedish national, could spend as much as 10 years in prison, Nicholas Bull, the agency’s lawyer, said in court today.

The hedge fund’s administrators won a lawsuit to recover $450 million from Peterson and other former employees in May.

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