
Westgate president charged with $150m investment fraud
Daily news headlines
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.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
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. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
How Finma milked Credit Suisse's CoCos to close UBS deal
An unusual clause in Swiss AT1 bonds allowed them to be written off, but could others follow suit?
US banks race against time as Fed plays climate catch-up
Long-awaited US climate risk exercise puts tough pressure on banks’ data and models
EU banks need ‘billions’ in hedges to pass new NII test
Declines in net interest income can be hedged, but the markets may struggle to handle the demand
CFTC chair gloomy over crypto legislation prospects
FIA Boca 2023: Behnam also asks Congress to grant more powers to regulate third-party tech providers
Missing Basel metric could have revealed SVB risks
US regulators did not implement economic value of equity test that SVB failed badly in 2021
Strict term SOFR trading rules ‘permanent’ says Fed’s Bowman
Official says restrictions on use of term SOFR swaps “should not be expected to change”
Esma still wants more tools to tackle clearing crises
Even after Emir 3 draft, EU regulator would like more powers over both foreign and domestic CCPs
Club rules? How German retail trading venues shut out PTFs
Murky rule books prevent non-bank market-makers from competing for Europe’s growing online customer demand