A former Switzerland-based investment manager who put money into funds tied to Bernard Madoff’s fraud and blamed losses on the collapse of MF Global Holdings Ltd. is liable for almost $500 million in fines and restitution, Bloomberg News reported yesterday. A U.S. judge in Chicago rendered the award on Jan. 11, more than three years after the U.S. Commodity Futures Trading Commission sued Nikolai Battoo and his businesses, accusing them of fraud. A former Florida resident, Battoo never contested the regulator’s lawsuit filed in September 2012, nor did he fight a parallel lawsuit filed in the same court on the same day by the U.S. Securities and Exchange Commission. Battoo ran a group of investment businesses under the common banner of BC Capital Group. Through his firms, he persuaded about 250 “pool participants” to invest at least $140 million in his Private International Wealth Management portfolios, according to U.S. District Judge Edmond Chang. “The defendants committed fraud in 2008 by failing to disclose the PIWM pools’ significant exposure to the Bernard Madoff ponzi scheme as well as trading losses suffered by other of Battoo’s hedge funds in which the PIWM pools were invested,” the CFTC said yesterday. Read more.
For further analysis of fraud and forensics in a commercial bankruptcy case, be sure to pick up ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case.