Weavering Employees Lose Appeal on Fund Loss RepaymentsKit Chellel
Two former employees of Weavering Capital (UK) Ltd. must participate in paying liquidators of the collapsed hedge fund $450 million after they failed to persuade a London court they weren’t responsible for its losses.
Weavering’s former deputy investment manager Edward Platt and director Charanpreet Dabhia denied knowing about the fraud uncovered by liquidators at MCR, a unit of Duff & Phelps Corp. They are among 10 employees, including fund founder Magnus Peterson, ordered last year to repay a total of $450 million.
Platt and Dhabia’s roles “in negligently enabling this business to continue, caused the loss claimed,” Judge Richard McCombe said, affirming the earlier ruling that they should have investigated Weavering’s trades more fully. The two were the only defendants to appeal the 2012 decision.
Peterson told Weavering’s investors he achieved returns of as much as 12 percent a year, while covering losses with sham swap contracts, MCR said at a London trial in 2011. While the U.K. Serious Fraud Office initially decided not to bring criminal charges over the fund’s 2009 collapse, the agency re-opened the case in June of last year.
Dabhia denies being negligent and said in a phone interview that he was a whistle blower who alerted accountants to the fraud when he discovered it.
“I have been a victim of the whole thing as much as investors,” Dabhia said. “I’ve lost my career.”
Katie Powell, Platt’s lawyer, didn’t immediately respond to e-mails seeking comment.
The men’s cases were “always without merit and had to be opposed,” MCR partner Geoff Bouchier said in an e-mailed statement.