![Risk.net](https://www.risk.net/sites/default/files/styles/print_logo/public/2018-09/print-logo.png?itok=1TpHrpuP)
Westgate president charged with $150m investment fraud
Hedge fund boss will face $150 million fraud allegations in a New York court
NEW YORK - James Nicholson, president of Westgate Capital Management, is facing charges over an alleged $150 million fraud at his investment management firm. The alleged fraud has all the hallmarks of a Ponzi scheme and led to investigators freezing Westgate's and Nicholson's assets last month.
He faces four felony charges, including securities fraud and investment adviser fraud, according to a statement by Lev Dassin, acting US attorney for the Southern District of New York.
The allegations date back to 2004 and allege Nicholson made inflated claims to investors of the value of assets under his management, claiming to manage between $600 million and $900 million. Prosecutors said $5 million in cheques made out to the fund's investors bounced in December 2008.
The fund's marketing brochures are also alleged to have disclosed "uniformly positive" returns each month between October 1999 and August 2008 except for September 2001 - echoing the Ponzi scheme fraud allegations made against Texan billionaire Sir Allen Stanford and those already proven against imprisoned fund manager Bernard Madoff.
Prosecutors allege Nicholson's fund performance was much lower during those months and also accuse him of withdrawing $400,000 from a number of Westgate accounts in 50 transactions made at small increments designed to evade the radar of reporting requirements.
Investigators appointed a receiver for Westgate last month in addition to freezing Nicholson's assets and those under management by Westgate.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Banks fret over vendor contracts as Dora deadline looms
Thousands of vendor contracts will need repapering to comply with EU’s new digital resilience rules
EU banks lose relief on model test after FRTB delay
Deferment of new trading book regime to January 2025 eats into transition period for “erratic” P&L attribution test
Sunday night football and the Basel III endgame
Big banks, political advocates and housing organisations are unlikely allies in race to dropkick new capital regime
Futures exchanges seek clarity on China licensing regime
Hazy details on landmark Futures and Derivatives Law breeds legal uncertainty, unnerving operators
Some EU banks wanted option to start FRTB on time
Representatives of member states raised possibility with European Commission at July meeting discussing the delay
For US Treasury troubles, treat the cause not the symptom
Regulatory alarm about hidden risk in the Treasury futures market misses the point, fund association execs write
Iosco delays pre-hedging consultation to November
Review into controversial practice splits industry
Honey, I shrunk the Fed. (Not a sci-fi fantasy)
Promoting the discount window may be the Fed’s key to shrinking its $7trn balance sheet, says Bill Nelson