Hedge Fund Accused of Hiding Losses from Investors


The SEC and the Commodity Futures Trading Commission have filed an emergency enforcement action against Illinois hedge fund manager Nikolai Battoo for allegedly overvaluing the assets under his management and concealing large losses from investors during the 2008 financial crisis.

Nikolai Battoo purportedly managed $1.5 billion for investors around the world, including at least $100 million for U.S.-based investors. He claimed to have track record of exceptional risk-adjusted returns. In fact, however, his investments in the Madoff Ponzi scheme and a failed derivative investment program resulted in major losses for his investors in 2008.

According to the SEC: “Rather than admit the losses to investors, Battoo has been overstating the value of his investments in a variety of ways. By boasting benchmark-beating returns, he has continued to attract new investors. However, during the past several months, investors have requested redemptions on their investments with Battoo. Instead of paying them, Battoo has provided a series of excuses ranging from the MF Global collapse to others placing a hold on investors’ money due to government investigations.” (“SEC Says Illinois Hedge Fund Manager Hid Major Losses During Financial Crisis,” HedgeCo.net.)

Page Perry is an Atlanta-based law firm with over 170 years of collective experience maintaining integrity in the investment markets and protecting investor rights.