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Magnus Peterson sentenced to 13 years in prison

23 January, 2015 | News Releases

The former head of the collapsed hedge fund Weavering Macro Fixed Income Fund Ltd was today sentenced to a total of 13 years in prison, having been found guilty of eight counts of fraud, forgery, false accounting and fraudulent trading earlier this week.

Ulf Magnus Michael Peterson, 51, Otham, Kent, was sentenced at Southwark Crown Court by Mr Justice Smith, who commented:

“You knew the risks that cheating entailed for investors …It was entirely foreseeable that investors would lose huge amounts. Sophisticated dishonesty on this scale calls for the maximum sentence possible.”

Mr Peterson was convicted on Monday, 19 January, following a three month trial.

For each count he received the following sentence:

  • Count 1 – 2.5 years in prison
  • Count 3 – 7 years to run consecutively
  • Count 4 – 4 years to run concurrently
  • Count 5 – 4 years to run concurrently
  • Count 6 – 4 years to run concurrently
  • Count 8 – 8 years to run concurrently
  • Count 14 – 2 years to run concurrently
  • Count 16 – 2.5 years to run consecutively

Jane de Lozey, SFO’s joint head of fraud, said:

“The length of sentence handed down reflects the damaging and extended nature of Mr Peterson’s crime. The loss to investors was vast and was compounded by the defendant’s continued deception as to the true health of their investments. That the SFO pursued this case demonstrates its determination to prosecute the top-most tier of complex economic crime. “

Over a six year period investors were misled into putting US$780m into the Macro Fund, which was marketed as a low risk and liquid fund primarily engaged in exchange trading. When investors began asking for their money back in December 2008 following the worldwide financial crisis, there were no real assets to fund any repayments. Unable to pay back investors, the Macro Fund ceased trading on the Irish Stock Exchange in March 2009 and liquidators were appointed. The net losses to the investors were approximately US$536m.

Throughout the fund’s existence, Mr Peterson rewarded himself handsomely from investors’ monies, to the value of £5.8m between 2005 and 2009.

This is one of the first hedge fund prosecutions of its kind to arise out of the 2008 financial crisis. A decision on director disqualification is to be scheduled to a later hearing.

For further details of Mr Peterson’s conviction, please click here.  

Notes to Editors:

  1. The SFO’s investigation involved liaising with approximately 50 different entities including the Irish Stock Exchange. Assistance was also gratefully received from investors, auditors, liquidators, the City of London police and overseas authorities including Sweden and the Republic of Ireland.
  2. Mr Peterson was charged on 11 December 2012 and attended his first court appearance at Westminster Magistrates’ Court on 7th January 2014. Details of the charge press release issued January 2013 are available here.
  3. A majority verdict of 10-2 was delivered for Count 1. All other verdicts were unanimous.
  4. Mr Peterson was acquitted of one count of fraudulent trading and five counts of fraud by false representation. An additional charge (count 7) of furnishing false information was withdrawn from the jury by the judge prior to verdict on the 9th December and a formal not guilty verdict entered.
  5. Weavering Capital (UK) Ltd was an incorporated investment management firm that went into administration on 19 March 2009. Its primary function was to act as investment advisor to a Cayman Islands incorporated hedge fund, Weavering Macro Fixed Income Fund Limited. Liquidators were appointed over the Macro Fund on 19 March 2009. WCUK had its offices in Mayfair, London.

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