NEW YORK, Aug 24 (Reuters) - A Cayman Islands court ordered that an outside expert help unwind a hedge fund managed by Platinum Partners, a New York-based firm facing dual investigations by U.S. regulators.
A local judge on Tuesday appointed insolvency specialist RHSW Caribbean as “joint official liquidators” of the Cayman-based Platinum Partners Value Arbitrage Fund (International) Limited, the so-called offshore version of Platinum’s flagship hedge fund offering, RHSW said in an email to Reuters.
RHSW will work with Bart Schwartz of Guidepost Solutions, who Platinum hired in July to assist with liquidating their main hedge funds and reporting to the U.S. Securities and Exchange Commission, which is investigating the firm along with the Department of Justice.
A spokesman for Platinum, which managed about $1.35 billion as of April, declined to comment.
The news underscores the mounting pressure on Platinum, which produced stellar returns since launching in 2003 but has been under significant scrutiny this year following criminal charges against longtime associate Murray Huberfeld that he bribed a union official in exchange for an investment in Platinum. Huberfeld recently pleaded not guilty.
Matthew Wright of RHSW told Reuters in an email that the firm was working with Guidepost to “manage the process of identifying, securing and protecting the assets of the Fund for the benefit of its stakeholders.”
RHSW, which did not provide a timeline, added that it will attempt to keep “all stakeholders informed of the progress of the liquidation” and that “any concerned stakeholders should feel free to contact us.”
The Cayman order came after a Platinum client, New Zealand’s Parris Investments, filed a complaint saying that the hedge fund manager had not returned their money as promised. The news was first reported by the New York Post.
Separately, at least four law firms have been attempting to gather Platinum clients for potential litigation, according to public announcements.
Landlord Boston Properties has quietly starting shopping Platinum’s more than 23,000 square feet of midtown Manhattan office space in anticipation that the firm will soon leave the space and break its lease, according to a person familiar with the situation who requested anonymity because the information is private. (Reporting by Lawrence Delevingne; Editing by Jonathan Oatis)