Weavering hedge fund founder Magnus Peterson convicted in fraud case

 
Jessica Morris
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Magnus Peterson was convicted at Southwark Crown Court in London (Source: Getty)

The chief executive of failed Mayfair hedge fund Weavering was found guilty of a fraud at Southwark crown court today, after his rouge investment fund collapsed swallowing $536m (£354m) of investors' cash in 2009.

Magnus Peterson was found guilty of eight courts of fraud, forgery, false accounting, fraudulent trading while being acquitted on eight other charges.

Weavering Capital was one of many funds which folded during the global financial crisis, as spooked investors tried to reclaim their cash.

Investors believed Peterson's fund was low-risk, investing only in exchange-traded futures and options, according to the SFO.

When investors started to ask for their money back during the global financial crisis, Peterson hid losses using financial products that couldn't be liquidated because they were with another fund under his control.

"Whilst Mr Peterson knew full well what the true value of the fund was when it collapsed, his investors did not," the Serious Fraud Office (SFO) said in a statement.

"To them, the extensive losses they suffered came as a complete shock."

Peterson, who will be sentenced on January 23, is facing a lengthy jail sentence.

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