US authorities’ hedge fund probe

Saturday, February 27, 2010

New York: US authorities are probing individuals close to NIR Group on whether the US hedge fund firm paid kickbacks to outsiders to inflate the value of its holdings, according to a report in the Wall Street Journal.

The US authorities have been investigating the company since last year on whether senior manager Corey Ribotsky defrauded investors about their returns and the holdings of his funds.

Mr Ribotsky managed more than $780m in hedge fund assets last year.

The company reported eight years of positive returns in its biggest fund starting 2001.

NIR invests its hedge-fund assets mainly in small public companies through privately negotiated deals and mostly receives notes that could be converted into stock at a discounted rate.

The authorities are investigating whether NIR valued certain notes at a higher level than the underlying value of the companies.

This story appeared in the printed version of the Irish Examiner Saturday, February 27, 2010