Platinum Partners Is Latest Wall Street Criminal

Today’s edition in financial crime comes to us via Platinum Partners, a New York based hedge fund that boasted outsized returns for over a decade. What a sleazeball company this was. It first came to the attention of regulators in the mid-2000s when the firm used a rabbi to get personal details from terminally ill patients and then used that information to buy insurance to profit from their deaths. Exploiting and profiting from the deaths of the terminally ill is a pretty sickening and grotesque way to make some money. Apparently, these guys didn’t care. In 2012, the fund overstated the value of an oil and gas firm that it controlled by not reporting the fact that an offshore rig the company owned had exploded and caused the deaths of three workers, multiple injuries, and an oil spill. 2013 was the beginning of the end for the fund as withdrawals starting increasing. In order to pay off current investors, the firm turned to the tried and true method of becoming a massive Ponzi scheme, using new investors’ money and loans to pay off the old investors. Unfortunately, Platinum Partners did not have the power and connections to keep their Ponzi scheme going as long as Bernie Madoff, but they did manage to hold off the inevitable for a few years. The main fund has already liquidated so we shall see how the defrauded investors will be compensated. Hopefully, the executives at Platinum Partners can join Madoff in prison and perhaps get some pointers on keeping a Ponzi scheme going for at least a decade.