Micalizzi fined 3mn pounds for covering up hedge fund losses
A hedge fund boss who is accused of covering up losses of 250 million pounds ($390 million) has been fined a record 3 million pounds and banned from working in finance by the City regulator Financial Services Authority.
Alberto Micalizzi, 43, is accused of lying to investors about "catastrophic losses".
Micalizzi, whose 318 million pounds Dynamic Decisions hedge fund collapsed in 2009, said he is referring the decision to the FSA's Upper Tribunal, which may overturn it.
In a statement, Micalizzi said he was confident the tribunal would see the FSA's conclusions did not add up.
He also criticised the FSA for announcing its decision before the tribunal hearing.
FSA in its ruling said: " Micalizzi's behaviour is amongst the most serious that the FSA has encountered," and said he demonstrated "a total lack of honesty and integrity".
The FSA alleges that at the time of collapse of Lehman Brothers and following more than 250 million pounds of losses in Dynamic's fund, Micalizzi lied about the deficit and launched a phoney bond in 2008 to cover its losses.
The bond allowed him to book a huge profit for the fund.
The FSA says the bond was "not a genuine financial instrument" and was a cover up for the fund's losses.
The FSA claims units of the bond were sold to the loss-making fund at a huge discount, then re-stated at their face value in the fund's accounts, creating a huge artificial profit.
That helped Micalizzi to keep attracting new investors.
The FSA said Micalizzi repeatedly provided it with false and misleading information.
Source:Britain News.Net
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