| April 10
April 10 A U.S. judge on Monday ordered a
hearing to look into possible leaks about a criminal
investigation of New York hedge fund management firm Platinum
Partners, whose top executives are charged with running a $1
William Burck, a lawyer for Platinum founder Mark Nordlicht,
said at a hearing last month, and again in a letter filed in
court on Friday, that an FBI agent may have leaked to the press
about the investigation before it became public.
U.S. District Judge Dora Irizarry in Brooklyn set a hearing
on the issue for May 12.
Nordlicht and six other Platinum executives were charged by
federal prosecutors in December with running a $1 billion
"Ponzi-like" fraud in which they over-valued assets and
selectively paid some investors ahead of others. All have
pleaded not guilty.
Platinum was known for producing exceptionally high returns
- about 17 percent annually in its largest fund. Platinum and
its executives are also facing civil fraud charges from the U.S.
Securities and Exchange Commission, and Platinum's funds have
been placed under the control of a court-appointed receiver.
In Friday's letter, Burck cited news articles in Bloomberg,
the Wall Street Journal and the New York Post last summer
reporting that Platinum was under investigation, all citing
unnamed people familiar with the matter.
Burck noted in the letter that an FBI agent who supervised
securities fraud investigations in the agency's New York office,
David Chaves, had admitted to leaking about another
investigation, that of sports gambler William "Billy" Walters,
who was convicted last week of insider trading.
Walters had moved unsuccessfully to dismiss the charges
against him because of Chaves' leaks.
Burck said leaks themselves could have hurt the value of
Platinum's funds, causing much of the harm to investors that
prosecutors are blaming on Platinum's executives.
Prosecutors filed their own letter on Monday, calling
Burck's letter "inflammatory" and saying he should file a formal
But Irizarry on Monday said that was "no response at all."
She ordered Burck to file another letter explaining in more
detail what action he sought by the court, and for prosecutors
to respond, in advance of the May 12 hearing.
Prosecutors are investigating Chaves in connection with the
leaks in the Walters case. Sean Casey, a lawyer for Chaves,
could not immediately be reached. Nor could a spokeswoman for
(Reporting by Brendan Pierson in New York; Editing by James