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What's Been Learned and Who's Charged in Abraaj Collapse

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The startling collapse of Abraaj Group, the once-mighty Middle Eastern private equity firm, continues to reverberate. Regulators in Dubai, where the dealmaker is based, have imposed a record fine, and Abraaj founder Arif Naqvi and a clutch of senior executives face legal charges in the U.S. The scandal, meanwhile, has all but frozen fundraising by other Dubai-based buyout companies.

The Dubai Financial Services Authority fined two Abraaj Group companies a combined $315 million for deceiving investors and misappropriating funds. “Misconduct and deceit were pervasive and persistent,” and management "rode roughshod” over its compliance function, the authority said. Mustafa Abdel-Wadood, a former Abraaj managing partner, admitted in a court in June that he lied to investors in an attempt to hide losses and raise more money. He’s one of six former Abraaj executives facing racketeering and securities-fraud charges after an investigation by New York prosecutors. The others are Chief Financial Officer Ashish Dave and managing directors Sivendran Vettivetpillai, Rafique Lakhani and Waqar Siddique.