By Laurence Fletcher
LONDON Dec 14 Britain's Serious Fraud Office
(SFO) has charged Magnus Peterson, the founder of Weavering
Capital, with fraud and forgery, just months after reopening its
investigation into the collapsed $600 million hedge fund.
The SFO said on Friday Peterson was charged with six
offences, comprising two of false accounting, one of fraudulent
trading, one of fraud by abuse of position and two of forgery.
Investors were left with hundreds of millions of dollars of
losses when the Weavering Macro fund, run by Swedish national
Peterson, 49, 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
The first hearing in Peterson's case will take place at
Westminster Magistrates' Court on Jan. 7.
The charges are the latest step in a long-running saga that
has gripped London's hedge fund community.
The SFO made two arrests in May 2009, but then dropped its
initial two-and-a-half-year investigation last September, saying
there wasn't "a reasonable prospect of conviction".
Some lawyers questioned the timing of that decision which
came days after a Cayman Islands court awarded damages of $111
million against two of the fund's directors.
However, in July the SFO performed a U-turn and reopened its
probe, just weeks after damages of $450 million were awarded
against Peterson and three other directors, including his wife,
in a civil case in Britain's High Court.
High Court Judge Sonia Proudman ruled 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 charges come amidst a crackdown by UK authorities on
alleged misconduct in the financial industry.
On Thursday the Financial Services Authority said Thomas
Ammann, a banker who encouraged two girlfriends to buy shares
based on privileged information, had been sentenced to two years
and eight months' jail for insider dealing. The FSA has now
secured 21 insider dealing convictions since 2009.