Platinum Partners and Mark Nordlicht—Fraud Scheme

California stockbroker fraud attorneyPlatinum Partners Founder Mark Nordlicht and Two of its Main Hedge Fund Advisory Firms Allegedly Orchestrated a Fraud Scheme Where Assets Values were Inflated and Investor Money was Moved to Cover Losses

Mark Nordlicht founder of Platinum Partners, and two of Platinum’s flagship hedge funds allegedly orchestrated a fraud scheme, according to SEC Documents currently under review by attorneys Alan Rosca and James Booker.

Suspicions arose after SEC examiners reviewed the firm, said SEC Documents note.

The SEC alleges that Nordlicht and the aforementioned hedge funds allegedly inflated the value of assets, SEC Documents state.

What is more, Nordlicht and the Platinum funds allegedly moved investor cash in order to rectify liquidity issues and to attempt to hide losses, the aforementioned SEC Documents report.

Nordlicht and the Platinum funds allegedly attempted to hide their emerging liquidity problems by purportedly moving cash from fund to fund, the SEC Documents note.

The SEC also highlights that Nordlicht and the Platinum funds allegedly made “preferential redemptions to favored investors,” according to SEC Documents.

What is more, Nordlicht and the Platinum funds also allegedly made misrepresentations in order to bring in new investors to the funds which were in trouble in what private in-house documents spoke of as so-called “Hail Mary time”, the SEC Documents also note.

The Peiffer Rosca Wolf securities lawyers are currently investigating two Platinum hedge funds and Mark Nordlicht’s alleged fraud scheme. However, unlike some of the other law firms investigating, their focus is on the investment professionals that promoted Platinum and recruited investors to invest in it.

Mark Nordlicht and the Platinum Funds Allegedly Overstated the Value of an Oil Company which Ranked among Platinum’s Biggest Assets

An SEC review of the aforementioned Platinum Funds alleges that Mark Nordlicht and the Platinum funds purportedly made financial reports which overstated the value of an oil company that served as one of the firm’s most valuable assets, according to an SEC Complaint filed in Brooklyn and presently being examined by attorneys Alan Rosca and James Booker.

What is more, Nordlicht was purportedly in cahoots with two colleagues and an executive of another major oil investment at the Platinum funds in order to allegedly siphon nearly $100 million from said company in order to bolster the profit line of the Platinum funds, according to the aforementioned SEC Documents.

Said company’s noteholders allegedly held priority over preferred shares and Platinum’s management and its affiliates and were also allegedly banned from taking part in any vote among noteholders to make changes to this priority, the SEC reports.

Next, in a stunning turn of events, according to SEC Documents, Nordlicht and others allegedly made a play to rig the vote by clandestinely transferring a huge block of notes to affiliates.

Then, said conglomerate allegedly cast votes in support of Platinum’s position, the SEC notes.

The document of solicitation then allegedly made false claims that Platinum only held only a tiny minority of the notes, the SEC reports.

The SEC’s Complaint then goes on to make charges against a myriad of individuals in addition to Nordlicht for their alleged participation in the alleged schemes.

In a very similar move, the U.S. Attorney’s Office for the Eastern District of New York today announced criminal charges, the SEC also notes.

Others charged in the SEC’s Complaint in addition to NordlichtPlatinum Management (NY) LLC, and Platinum Credit Management LP include the following:

•       David Levy, owner and co-chief investment officer along with Nordlicht.

•       Daniel Small, former managing director and portfolio manager of certain Platinum funds.

•       Uri Landesman, former managing general partner of certain Platinum funds.

•       Joseph Mann, who worked in Platinum Management’s investor relations department.

•       Joseph SanFilippo, CFO of a Platinum hedge fund.

•       Jeffrey Shulse, CFO of Black Elk Energy, the oil company used in the illicit $100 million scheme.

Funds managed by Platinum Management are currently in a liquidation proceeding in the Cayman Islands, according to the SEC Complaint.

The Peiffer Rosca Wolf Securities Lawyers Often Assist Investors

The Peiffer Rosca Wolf securities lawyers assist investors who lose money as a result of alleged fraud schemes. The Peiffer Rosca Wolf securities lawyers are currently investigating two Platinum hedge funds and Mark Nordlicht’s alleged fraud scheme. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Investors who believe they lost money as a result of two Platinum hedge funds and Mark Nordlicht’s alleged fraud scheme are encouraged to contact the securities lawyers at Peiffer Rosca Wolf, Alan Rosca or James Booker, for a free no-obligation evaluation of their recovery options, at 888-998-0520 or via e-mail at arosca@prwlegal.com or jbooker@prwlegal.com.

Alan Rosca (1123 Posts)

Alan is a securities lawyer. He also teaches Securities Regulation at the Cleveland-Marshall College of Law. He focuses his legal practice on complex commercial and financial litigation and arbitration, particularly in the areas of securities and investment fraud. His office is in Cleveland, Ohio.


In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.