Regulators charged two more hedge fund managers with helping feed funds to a Minnesota Ponzi scheme that eventually defrauded victims of at least $3.65 billion, the Wall St Journal reports.. According to the Securities and Exchange Commission, Minnesota hedge fund managers James N. Fry and Michelle W. Palm invested more than $600 million in assets through Arrowhead Capital Management LLC with Thomas Petters, who was convicted of fraud. The arrangement allegedly netted the pair $42 million in fees.
The SEC complaint said Petters had promised investors their money would be used to buy vast amounts of consumer electronics to be resold the to so-called big box retailers. In reality, the business didn't exist. The enforcement agency accused Fry, Palm and Arrowhead of later concealing Petters's inability to pay for the scheme by entering into secret note extensions with Petters….
Don't stop now...there's more at http://online.wsj.com/article/BT-CO-20111109-720611.html
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