The trial of former Platinum Partners portfolio manager Daniel Small for fraud got underway in Brooklyn on Monday, with the jury hearing from the prosecution how the defendant was involved in a scam against one of the now defunct hedge fund’s portfolio companies, according to a report by Reuters.
The trial of former Platinum Partners portfolio manager Daniel Small for fraud got underway in Brooklyn on Monday, with the jury hearing from the prosecution how the defendant was involved in a scam against one of the now defunct hedge fund’s portfolio companies, according to a report by Reuters.
Small is the last of several former employees at New York-based Platinum, which once had around $1.7 billion in assets, to come to trial in connection with an allegedly fraudulent scheme involving bondholders of Black Elk, a Platinum-controlled oil exploration company. The prosecution claims that Small and other Platinum employees, diverted $70 million raised from asset sales to the hedge fund ahead of Black Elk’s bankruptcy filing in 2015.
Platinum co-founder Mark Nordlicht and co-chief investment officer David Levy were found guilty by a jury in July 2019 for their part in the scheme.
Nordlicht and Levy were also accused of overvaluing assets in Platinum’s flagship Value Arbitrage fund, but were acquitted of those charges along with the fund’s former chief Financial coal officer, Joseph SanFilippo. Charges against two other defendants were dropped after they completed deferred prosecution agreements, while a seventh defendant died while the case was pending.
