Judge Gifts World A Third Platinum Partners Trial

Two would have been too confusing.
By Chris Potter (Flickr: 3D Judges Gavel) [CC BY 2.0], via Wikimedia Commons

By Chris Potter (Flickr: 3D Judges Gavel) [CC BY 2.0], via Wikimedia Commons

The salacious story of Platinum Partners seemed to have everything: Life insurance policies purchased in absence of the knowledge and approval of the insured, a leather-bound pay-to-play scandal involving the Rikers Island guard union, angry judges, FBI raids, massive redemptions that can’t be paid, bankruptcy filings, aborted plans to flee the jurisdiction, tax-dodging practitioners of indecent exposure at the dinner table, witness intimidation and a Whitney Tilson hot take. But no! There’s more, specifically defendants turning on one another and threatening to turn the upcoming trial into an incoherent soap opera. So we get two! (Three, actually, if you count the pay-to-play trial.)

In a decision on Monday, U.S. District Judge Brian Cogan in Brooklyn severed the trial of Jeffrey Shulse, the former chief executive at Platinum’s Black Elk oil exploration company, while declining Nordlicht’s own bid to be tried separately.

Cogan said Shulse’s strategy of maintaining his innocence while implicating Nordlicht and other defendants would subject them to “double prosecution.”

He also said it would inevitably lead to frequent and disruptive objections and finger-pointing, “seriously disrupting trial in a manner that would test any jury….”

Prosecutors criminally charged seven defendants in December 2016 over two alleged fraudulent schemes involving Platinum…. In the second scheme, Black Elk was accused of running a $50 million bond fraud, where it diverted proceeds of asset sales to Platinum though bondholders had priority.

Judge splits NY hedge fund trial as one defendant turns on others [Reuters]