Federal authorities said on Monday they were unsealing an indictment charging a hedge fund founder and six others in a $1bn fraud case.
US attorney Robert L Capers in New York City scheduled a news conference to discuss the case against Platinum Partners founder and chief investment officer Mark Nordlicht.
Andrew Ceresney, director of enforcement at the US Securities and Exchange Commission, was also due to speak at the news conference.
Nordlicht was arrested at his New Rochelle, New York, home in connection with charges contained in an indictment filed in federal court in Brooklyn.
Others arrested included David Levy, Platinum Partners’ co-chief investment officer, and Uri Landesman, former president of the firm’s signature fund, said an FBI spokeswoman, Adrienne Senatore.
In June, the FBI arrested a longtime associate of Nordlicht, Murray Huberfeld, along with Norman Seabrook, the head of the country’s largest municipal jail guard union.
Federal authorities alleged Seabrook got tens of thousands of dollars in cash in exchange for steering $20m in union money to the hedge fund. Seabrook and Huberfeld have pleaded not guilty.
Founded in 2003, Platinum Partners until this year had more than $1.3bn under management. It produced exceptional profits for investors, with its flagship fund generating an average return of 17% since it started, Reuters has reported.
This year, a series of investigations tied to Platinum Partners came to a head, leading to a Cayman Islands court placing its two main funds into liquidation in August.
There was no immediate information on an attorney who could comment on Nordlicht’s behalf.
Platinum representatives did not immediately respond to a comment request.
