A tribunal has dismissed an appeal by a former hedge fund boss against a £2.7 million fine for deliberately misrepresenting his fund’s value.
Alberto Micalizzi was chief executive of Dynamic Decisions Capital Management, which ran the DD Growth Premium Master fund.
The fund was presented as being low risk, highly liquid and market neutral, but in the final quarter of 2008 it lost approximately 85% of its value.
The Financial Conduct Authority (FCA) stated that Micalizzi ‘sought to conceal these losses from investors by deliberately misrepresenting the fund’s value and subsequently entering into agreements with third parties to acquire units with a face value of $700 million (£413 million) in purported convertible bonds issued by a Nevada based company backed by Russian diesel oil’.
The FCA consequently imposed a £2.7 million penalty on Micalizzi and banned him from the industry.
Micalizzi appealed against this, but the tribunal found ‘beyond doubt that the bonds were never genuine’ and that he ‘deliberately misrepresented the position to the investors’.
The tribunal verdict added: ‘Whilst Mr Micalizzi was superficially plausible and appeared to be frank and helpful in his evidence, on analysis we have found that in many instances he was none of those things.’