August 31, 2017 / 9:37 PM / a year ago

Platinum Partners founder's lawyers drop appeal on witness contact order

NEW YORK (Reuters) - Lawyers defending Platinum Partners founder Mark Nordlicht in a $1 billion fraud case on Thursday said they would no longer pursue their appeal of a federal judge’s order restricting the attorneys’ contact with potential government witnesses.

Mark Nordlicht, Platinum Partners founding partner and chief investment officer, exits after a hearing at U.S. Federal Court in Brooklyn, New York, U.S., January 12, 2017. REUTERS/Brendan McDermid

In a motion in the 2nd U.S. Circuit Court of Appeals, Nordlicht’s lawyers said they were satisfied with U.S. District Judge Dora Irizarry’s statement at a court hearing on Monday that she had not intended to “preclude you from speaking to an attorney for a prospective witness or even a prospective witness,” as long as they did not intimidate witnesses.

Prosecutors in December charged Nordlicht and six other executives at the hedge fund firm with running a $1 billion “Ponzi-like” fraud in which they overvalued assets and selectively paid some investors ahead of others. All pleaded not guilty.

The company’s funds have been placed under the control of a court-appointed receiver. Platinum was known for producing exceptionally high returns - about 17 percent annually in its largest fund.

Nordlicht’s lawyers initially petitioned the 2nd Circuit after Irizarry ordered them at a hearing on Aug. 18 to stop contacting government witnesses or their lawyers, or face sanctions.

Irizarry said at the time that she was concerned that they had tried to intimidate a key government witness, identified in court papers only as “CW-1,” but Nordlicht’s lawyers said the broad order would prevent them from defending their client.

Reporting By Brendan Pierson in New York

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