| LONDON, July 9
LONDON, July 9 Britain's Serious Fraud Office
(SFO) has reopened its investigation into collapsed hedge fund
Weavering Capital, just weeks after damages of $450 million were
awarded against the fund's manager in a civil case in the High
The decision marks a U-turn by the fraud agency after it
ended a 2-1/2 year probe into Weavering last September, saying
there was no reasonable prospect of conviction.
Investors were left with hundreds of millions of dollars of
losses when the Weavering Macro fund collapsed during the credit
crisis. The fund was found to have more than $600 million in
interest rate swaps where the counterparty was a firm related to
In May this year damages of $450 million were awarded
against Weavering Macro's manager Magnus Peterson, after a High
Court case brought by the liquidators of Weavering's British
Judge Sonia Proudman ruled that the interest rate swaps on
which the case centred were a "sham" used to manipulate net
asset value figures to give investors the impression the Macro
fund was successful.
"The (SFO's) director, following a review of the High Court
Civil Judgment by Mrs Justice Proudman on the 31 May 2012, has
reopened a criminal investigation into Weavering Capital UK,"
the SFO said in a short statement on its website.
The move is another major decision by SFO Director David
Green, who took over from Richard Alderman in April and who told
Reuters last month the SFO has to "prove itself".
Last week the SFO said it would investigate the manipulation
of interbank lending rates and last month it dropped its probe
of property tycoon Vincent Tchenguiz.
The decision last September to end the investigation into
Weavering, which raised questions over London's ability to
uncover and punish white-collar crime, came just days after a
Cayman Islands court awarded damages of $111 million against two
of the fund's directors.
During its investigation the SFO made two arrests in May
2009, including Peterson.
"The decision of the SFO to re-open the investigation is
welcomed by Weavering's investors. They and the professional
advisers involved in the case will provide every assistance to
the SFO," said Jones Day partner Barnaby Stueck, who represented
the liquidators in the civil case.