Serious Fraud Office makes first UK hedge fund arrests

Serious Fraud Office makes first UK hedge fund arrests


In the first arrests of hedge managers in Britain since the onset of the credit crunch, the Serious Fraud Office (SFO) took two men into custody on Friday.

The men in their mid-forties were arrested in connection with failed hedge fund Weavering Capital. It has been said that the fund used swaps to artificially inflate its value before it eventually collapsed earlier this year, owing investors over £395 million.

Two houses in Kent and Surrey were searched by the SFO, before the unnamed men were questioned at a police station.

In March, administrators were appointed to Weavering Macro Fixed Income hedge fund and uncovered a sizeable interest rate swap position between Weavering Macro Fixed Income and related firm, Weavering Capital Fund, registered in the British Virgin Islands.

In a statement, the SFO said that the swaps “inflated the apparent net asset value of the Macro fund”, adding that the investigation would focus on the transactions made between the two firms and no charges had been made yet.


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