Wall Street Scion Is Accused of Faking Investments – New York Times

But the authorities said that he blew through most of that cash “as a result of aggressive choices trading” in his personal brokerage account.

Daniel Levy, Mr. Caspersen’s lawyer, declined to comment.

Mr. Caspersen was a partner at the Park Hill Group, which specializes in raising cash for private equity firms and hedge funds. The Manhattan firm fired Mr. Caspersen on Monday and promptly removed his profile from its website.

Until last fall, Park Hill was section of the sprawling empire of the private equity giant the Blackstone Group. It is now section of PJT Partners, the advisory firm that was spun from Blackstone and is run by the investment banker Paul J. Taubman. PJT said in statement that it was “stunned and outraged” to learn of the allegations. The firm added that it was cooperating along with the authorities.


Fraud Charges for Financial Executive

The S.E.C. said that Andrew Caspersen, a partner at Park Hill, solicited $95 million to invest in a shell company.

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The case highlights the broader issue of exactly how a lot research and checking institutional investors actually do once making an investment, and exactly how a lot of it comes down to a personal connection and trust.

“This action amply demonstrates that even sophisticated institutional investors are not immune to financial scams,” said Andrew M. Calamari, director of the Brand-new York office of the Securities and Exchange Commission, which brought a civil complaint versus Mr. Caspersen.

It might additionally boost questions concerning the internal controls in place at Park Hill, offered that the authorities say Mr. Caspersen’s scheme went on for months prior to it was detected.

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Shares of PJT Partners plunged nearly 11 percent on the news of the charges. Late Monday, Block & Leviton, the securities litigation firm, said it was investigating whether PJT and its officers and directors violated federal securities laws. The firm represents large institutional investors.

PJT said it believed Mr. Caspersen acted on his own. After discovering of potential improper behavior, the firm conducted an internal investigation and reported the matter to federal prosecutors in Manhattan.

Mr. Caspersen grew up mainly in an exclusive suburb in western Brand-new Jersey prior to attending the Groton School in Massachusetts, one of the most expensive boarding schools in the country. He was a leader of the football group and he additionally rowed.

After graduating from Groton in 1995, he went to Princeton University where he met Catherine F. MacRae, that was the daughter of a founding partner of the law firm LeBoeuf, Lamb, Greene & MacRae, which later merged to form Dewey & LeBoeuf. Both dated for several years.

Ms. MacRae, a research analyst at Fred Alger Management, was killed on Sept. 11, 2001, once terrorists crashed two planes in to the Globe Trade Center. She had worked in Fred Alger’s offices on the 93rd floor of the north tower.

Together along with Ms. MacRae’s family, Mr. Caspersen made a memorial fund to incentive education programs for youngsters from low-income families.

Mr. Caspersen’s father, Finn M.W. Caspersen, was a prominent philanthropist and the heir to the Helpful Corporation fortune. The elder Mr. Caspersen was chairman and chief executive of the consumer finance company for nearly two decades prior to selling the firm in 1998 for $8.6 billion to Household International, which was later acquired by the London-based bank HSBC.

In 2008, Finn Caspersen pledged $30 million to Harvard Law. A year later, he killed themselves at age 67 along with a single gunshot to the head. concerning 800 people attended his funeral in Morristown, N.J.

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Mr. Caspersen was known to be battling kidney cancer once he killed himself. However soon after it emerged that his name had surfaced in a federal government crackdown on overseas banks that were assisting wealthy Americans shelter cash to prevent paying taxes.

Finn Caspersen was an energetic supporter of Brand-new Jersey Republicans enjoy former Gov. Tom Kean. Mr. Caspersen was additionally populared in equestrian circles and was said to have actually competed along with Prince Philip, the husband of Queen Elizabeth, in Windsor, England.

The scheme of the younger Mr. Caspersen, federal authorities say, began last summer and ended only a few weeks ago. It is not clear why the executive, that arguably was successful and wealthy in his own right, might have actually called for the money.

Still, last summer Mr. Caspersen, that had previously lived on the Upper East Edge of Manhattan, established a shell company called Irving Place III SPV LLC that he soon began seeking to boost cash for from institutional investors, the authorities said.

The shell company was like the name of a legitimate investment car that Park Hill was raising cash for at the time called Irving Place Capital Partners III SPV. Irving Place Capital was originally a private equity fund of Bear Stearns, the Wall Street firm that imploded in 2008.

Mr. Caspersen, that previously worked for Coller Capital, a fund that buys private equity fund assets, never ever told prospective investors the shell company was controlled forever by him, the authorities said. Mr. Caspersen gained up email accounts and invented employees and even went as far as to develop a fake domain name to further the scheme, they said.

The scheme began to fall apart this month once the foundation affiliated along with the hedge fund asked for its $25 million plus interest to be returned, the authorities said. On March 11, Mr. Caspersen said the funds would certainly be returned by the end of the month. The foundation has actually not yet received the money, the authorities said.

A few days later, on March 14, Park Hill learned that Mr. Caspersen was raising cash for his own investment car once an unidentified firm complained concerning it. Park Hill after that hired lawyers from Paul, Weiss, Rifkind, Wharton & Garrison, including litigation partner Aidan Synnott, to conduct an internal investigation. The law firm notified federal prosecutors of its findings the next day.

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By March 18, authorities said the account where the hedge fund’s foundation had wired its $25 million had a balance of around $40,000.

Mr. Caspersen was released on Monday after he posted a $5 million bond co-signed by three people and secured by two residences.

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