The funds manager, Michael Balboa, was convicted of securities fraud in 2013. In June 2014, he began his four-year prison sentence. He was accused of inflating the value of Nigerian debt. Since it appeared to be performing much greater than it actually was, he was able to generate more income from investors.
Millennium Global Emerging Credit Fund Ltd. began liquidation in 2008. KPMG is liquidating the fund, and has said that Citibank undervalued assets when it closed out trades during the financial crisis. The assets Citibank was said to undervalue were also related to Nigerian debt. Citibank has claimed that the assets were not liquid and hard to value, but even had they been off it was not to the extent Millennium claims.
Sounds a lot like a schemer trying to fool its associates into helping them repay a debt. The fund failed at the height of the financial crisis. Nearly seven years after the fact lawsuits are still being pursued over undervalued assets. In similar news, the Fed announced Wednesday they would raise the benchmark lending rate for the first time since the financial crisis.
Works CitedChellel, K. (2015, 12 09). Citigroup Sued by Failed Hedge Fund Over 2008 Crisis Trades. Retrieved 12 16, 2015, from Bloomberg: http://www.bloomberg.com/news/articles/2015-12-09/citigroup-sued-by-failed-hedge-fund-over-2008-crisis-trades