In an undated announcement on its website, the Serious Fraud Office states that it has re-opened its investigation into Weavering Capital UK, the advisor to the US$639 million Weavering Macro Fixed Income Fund Ltd hedge fund which collapsed in 2008:
“The Director, following a review of the High Court Civil Judgment by Mrs. Justice Proudman on the 31 May 2012, has reopened a criminal investigation into Weavering Capital UK.
Weavering Capital (UK) Ltd went into administration in March 2009. The company was advisor to a Cayman Islands incorporated hedge fund called Weavering Macro Fixed Income Fund Ltd which had funds of US$639 million under management in 2008. The investigation concerns interest rate swap transactions between the fund and a related Weavering company in the British Virgin Islands which had the effect of inflating the net asset value of the fund.”
The SFO’s change of heart is a further sign of the impact of the agency’s new director, David Green QC. Last week the SFO decided that it would, after all, open a criminal investigation into the alleged manipulation of LIBOR; and in June announced that it was ending its disastrous investigation into Vincent Tchenguiz.
The SFO initially decided to drop its Weavering investigation in September 2011. That was a surprising decision, given that a Cayman court had just found two of the fund’s directors guilty of wilful negligence in a civil action brought by the fund’s liquidators. In May 2012 the English High Court found Magnus Peterson, the founder of the fund to have committed fraud and breached his duty of care and so liable for deceit in a civil case brought by the Fund’s liquidators. It is a review of that judgment that has now led the SFO to re-open the case.