Securities Case Brought Over Caspersen Fraud
Shareholders of PJT Partners Inc. have brought a class action lawsuit against the publicly traded investment bank. The complaint comes in the awake of the arrest of Andrew Caspersen, who previously was one of the top officials at the bank’s Park Hill Group unit. Caspersen is accused of running a $95M fraud in secret. He is also a defendant in this lawsuit.
According to authorities, Caspersen falsely told investors that he was raising funds for supposed private equity investments when actually he was placing their money in high-risk options bets. He lost millions of dollars through options trading in his own accounts. Among his investors were the charitable foundation of a hedge fund and other institutional clients.
Caspersen was arrested and charged last month, as well as fired from PJT Partners. Investor Gregory Barrett claims that the investment bank misled shareholders by not disclosing that it had inadequate fraud prevention and compliance controls. The shareholder lawsuit points to purported evidence of alleged control failures, including an anonymous quote in the New York Times stating that Caspersen had availed of Park Hill Group’s payment system to give investors invoices and keep his scam going.
Sabal Sues Deutsche Bank Over Swap Transaction
Sabal Limited LP is suing Deutsche Bank AG (DB). Sabal claims that the German bank falsified documents after coming to the realization that the outcome of a swap transaction wasn’t going to be in its favor. Deutsche Bank is accused of improperly holding nearly $1M from the Texas asset management firm.
According to Sabal, in 2011, Deutsche Bank proposed a way of “cheapening” the firm’s capital costs through a swap tied to the DB Pulse USD Index. Deutsche Bank purportedly said that if the swap was based on this index it would generate a lot of funds. The transaction was finalized a few months later.
Sabal say that when calculating the amount that it was supposed to pay, Deutsche Bank, purportedly put a negative number into the calculation formula that should not have been put in there, causing it to inaccurately calculate Sabal’s payments. Also, Sabal said that Deutsche Bank modified transaction terms to justify another $96OK in collateral.
The firm is accusing the bank of ignoring actual payment calculations and defaulting on payments owed to the firm. Sabal is also seeking a court order to mandate that Deutsche Bank properly calculate the payment rate. It accused Deutsche Bank of trying to end the swap by alleging breaches by Sabal.
Dallas Pension Fund Sues Financial Advisory Firm
The Dallas Police and Fire Pension System is suing CDK Realty Advisors. The complaint is in response to a Texas securities lawsuit filed by the firm claiming that the pension fund did not pay $139,479 in management fees.
The lawsuit is alleging numerous fiduciary duty breaches. According to the Texas pension group, the financial advisory firm managed certain investments that sustained huge losses. The Dallas Police and Fire Pension system believes that the firm should have done better safeguarding the investments. It also is accusing CDK Realty Advisors of earning fees that were improperly high.
Meantime, CDK Realty Advisors is not accountable for the poor investments made by the pension fund It argued that the investment deals, which it approved, have substantially increased the pension group’s retirement money.
PJT Shareholders Sue Firm, Caspersen Over $95M Fraud, Law360, April 18, 2016
A Wall Street Family’s Charmed Life Is Thrown Into Turmoil, NY Times, April 5, 2016
Deutsche Bank Sued By Investment Firm Over Swap Dispute, Law360, March 25, 2016
FBI raids offices of investment firm tied to Dallas Police and Fire Pension System, The Dallas Morning News, April 6, 2016