WHISTLEBLOWER NEWS QUOTE OF THE DAY:

"Whistleblowers continue to be an important weapon in the CFTC’s arsenal, and we are dedicated to rewarding valuable information and cooperation."

— Christopher Ehrman, the Director of the CFTC’s Whistleblower Office

Hedge fund linked to kickback probe had alleged ties with massive Ponzi scheme

Platinum Partners, the hedge fund at the center of an alleged New York City municipal union kickback scandal, has a history that’s sordid even for Wall Street — with alleged ties to one of the largest Ponzi schemes in history, and a confusing trail of documents that raise more questions than answers, The Post has learned.

Murray Huberfeld and Mark Nordlicht, two top executives of the $1.3 billion fund, allegedly enlisted other hedgies and their wives to invest in a feeder fund for Scott Rothstein, a trustee lawsuit claimed.

Rothstein was convicted of running a Florida Ponzi scheme and is now serving 50 years for racketeering and securities fraud, according to court documents.

Rothstein scammed investors by getting them to bankroll fake lawsuits for litigants who couldn’t afford to pay for their own litigation, with the promise of repaying those investors with settlement money, which turned out to be fake, court documents show.

It ran from 2005 to 2009, and ballooned to $1.2 billion in part because of the investments made by Huberfeld and Nordlicht, according to the suit.

A group of hedgies and their wives were accused in a civil suit brought by the trustee in charge of unwinding Rothstein’s scam of knowing ahead of time that they were funding a Ponzi scheme — a claim they deny. The civil suit was settled in 2012 for $38 million.

Platinum came into the public eye through the charges brought against Norman Seabrook, the ex-head of the NYC correction officer’s union, who pleaded not guilty on Friday to allegedly taking a $60,000 bribe for a $20 million investment in Platinum. Huberfeld has also pleaded not guilty. Nordlicht has not been charged.

Platinum is now in the process of liquidating all three of its funds, Montieth Illingworth, a spokesman for Platinum, told The Post. read more »

CFTC Announces Fourth Whistleblower Award

The U.S. Commodity Futures Trading Commission (CFTC) today announced an award of approximately $50,000 to a whistleblower who voluntarily provided key original information that led to a successful CFTC enforcement action.

The award is the fourth award made by the CFTC’s Whistleblower Program to a whistleblower who provided valuable information about violations of the Commodity Exchange Act (CEA), and the third whistleblower award made in the last 10 months. The award represents between 10 percent and 30 percent of the monetary sanctions collected to date, and the whistleblower will be entitled to the same percentage of any additional amounts collected. 

By law, the CFTC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.

“Whistleblower tips are an increasingly important source of information for the Division, and we encourage anyone with knowledge of a violation of our statute to contact our Whistleblower Office as soon as possible,” said Aitan Goelman, Director of the CFTC’s Division of Enforcement.

Christopher Ehrman, the Director of the CFTC’s Whistleblower Office, added, “Whistleblowers continue to be an important weapon in the CFTC’s arsenal, and we are dedicated to rewarding valuable information and cooperation.”

The CFTC’s Whistleblower Program was created by Section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). The CFTC pays monetary awards to eligible whistleblowers who voluntarily provide the CFTC with original information about violations of the CEA that leads the CFTC to bring a successful enforcement action resulting in monetary sanctions exceeding $1,000,000.

The CFTC also pays monetary awards to eligible whistleblowers whose information leads to the successful enforcement of a related action brought by another governmental entity where that action is based on original information submitted to the CFTC, and the CFTC also brings an action based on that same information.

Whistleblowers are eligible to receive between 10 percent and 30 percent of the monetary sanctions collected. All whistleblower awards are paid from the CFTC Customer Protection Fund established by Congress and financed entirely through monetary sanctions paid to the CFTC by violators of the CEA. No money is taken or withheld from harmed investors to fund the program. read more »