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Platinum’s California Oil Fields Said to Be Subject of Probe

  • Federal prosecutors in Brooklyn are investigating hedge fund
  • Probe said to focus on illiquid assets, including oil fields
Updated on

Before federal agents raided the offices of Platinum Partners in June, the $1.2 billion hedge fund had been reporting robust returns, thanks partly to oil fields it owns in California.

Platinum counted the oil fields as its most valuable asset, worth many times what it paid for them, according to its most recent audited financial statement. But the project was a flop that never produced much oil and wasn’t worth nearly as much as Platinum said, according to three people who were involved with the operation and who asked not to be named discussing the private business.