Bloomberg News

Platinum Settles With Razorback in Rothstein Ponzi Case

February 09, 2012

(Updates in third paragraph with Platinum comment.)

Feb. 8 (Bloomberg) -- Platinum Partners Value Arbitrage, a New York hedge fund, settled a lawsuit today without paying any money to investors who claimed it aided a $1.2 billion Ponzi scheme run by imprisoned confidence man Scott Rothstein.

The settlement came in state court in Fort Lauderdale, Florida, where investors known as the Razorback Group accused Platinum and others of hiding the truth about the nature of the Rothstein fraud, which unraveled in 2009.

“Platinum and the plaintiffs have agreed to dismiss their respective claims against one another,” said Platinum spokesman Ray Casas in an e-mail. “Neither side has paid or promised to pay any money to the other.”

The settlement also covers Centurion Structured Growth LLC, a related hedge fund, Casas said. Bill Scherer of Conrad & Scherer LLP, the attorney for Razorback, didn’t immediately return a call seeking comment.

Rothstein, 49, is a disbarred attorney serving 50 years in prison for a scheme he ran out of his Fort Lauderdale law firm. He sold stakes to investors in fictitious sexual- and employment-discrimination cases. Seven other people have been criminally charged.

Razorback, which claimed losses of $188 million, is preparing for a civil trial on March 5 against Toronto-Dominion Bank and Gibraltar Private Bank & Trust, among others.

The case is Razorback Funding LLC v. Rothstein, 09-062943, 17th Judicial Circuit in Broward County (Fort Lauderdale).

--Editors: Glenn Holdcraft, Fred Strasser

To contact the reporters on this story: Susannah Nesmith in Miami at susannahnesmith@yahoo.com; David Voreacos in Newark, New Jersey, at dvoreacos@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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