The Moore Charitable Foundation and Kendall JMAC, which are both owned by hedge fund billionaire Louise Bacon, have filed a securities fraud lawsuit against PJT Partners over the $16M loss that they claim they sustained in the Ponzi –like scam perpetuated by former investment adviser Andrew Caspersen.
The two entities want full restitution plus interest. They also filed a securities fraud lawsuit against Caspersen, who was a partner and managing director at the PJT Partners’ Park Hill Group when he defrauded investors.
Caspersen pleaded guilty in 2016 to bilking investors of $38M. He said he had a gambling addiction that compelled him to make up bogus Wall Street deals. He is serving a four-year prison term for his crimes.
According to prosecutors, the former American financier persuaded friends, family, and institutional investors to invest in secured loans to private equity companies. He took a portion of their money to trade options in his own account and pay interest payments to earlier investors. He also diverted $8.9 from Park Hill Group.
The Moore Charitable Foundation, which is a trust set up to protect wildlife, water, and land, invested close to $25M in a deal that involved Caspersen. The plaintiff contends that it thought the investment was for an Irving Place investment vehicle, which it was not.
Caspersen had solicited investments for a shell company that he named Irving Place III SPV LLC. The name closely resembled the name of a legitimate private equity fund called Irving Place Capital Partners III SPV. (The Irving Place fund that Caspersen claimed to set up was not a legitimate business.) He falsely told investors that the $900M of assets in the legitimate fund would keep their money secure.
Caspersen later tried to solicit another $20M from the charitable foundation. It was at that point that the plaintiff detected and reported certain irregularities with the proposed deal.
The Moore Charitable Foundation says that PJT Partners should be held accountable for “its employees actions and for the foundation’s loss.” Meantime, the investment bank maintains that the securities fraud lawsuit seeking to hold it liable for Caspersen’s personal actions is meritless and that he is the one who is “solely responsible.”
PJT Partners has repaid $8.6M of the foundation’s funds. This is the amount that, according to the foundation, PJT’s insurer offered to cover. The foundation claims that because the insurance company did not say it would cover the rest of the loss, PJT Partners is refusing to pay back those funds.
Institutional Investor Fraud
Even the most sophisticated investors can fall victim to fraud. At The SSEK Partners Group, we are committed to helping high net worth individual investors and institutional investors in recouping their losses sustained because financial representatives, brokers, investment advisers, money managers, and others were negligent, careless, or purposely committed a crime or other wrongdoing.
It is important that you are represented by an institutional investor fraud law firm with the experience and resources to handle these types of securities fraud cases. At The SSEK Partners Group, our securities attorneys have experience successfully representing private foundations, wealthy individuals, charitable organizations, corporations, financial firms, banks, partnerships, retirement plans, large trusts, school districts, and municipalities. Contact us today to request your free case consultation.
SEC Bans Andrew Caspersen After $38M Financial Fraud, Institutional Investor Securities Blog, September 7, 2016