Petters, the forgotten Ponzi
The alleged $3 billion Ponzi scheme involving Tom Petters has never gotten the attention it deserved.
Some of that is because the case broke open right around the time Lehman Brothers was filing for bankruptcy. And given that the scandal took place in Minnesota and involved mainly midwestern hedge funds funneling money to Petters operation, it didn’t galvanize the attention of the East Coast media.
But Petters continues to make headlines–albeit small ones–even as Bernie Madoff and Marc Dreier go away for lengthy prison sentences.
Most notably, the Securities and Exchange Commission last week filed civil charges against Greg Bell, the former manager of Chicago-based hedge fund Lancelot Management, which invested $2 billion in Petters’ operation. Regulators allege that Bell “pocketed millions of dollars in fraudulent fees at the expense of investors in the funds.”
Kudos to Dealbreaker.com and freelance journalist Teri Buhl for staying on the Petters story and speculating which other hedge fund manager may be on the SEC’s radar screen.