Nigerian debt: Portfolio manager jailed four years

A former London-predicated portfolio manager was sentenced to four years in confinement on Monday for inflating his hedge fund’s assets by manipulating the value of Nigerian debt, according to a report by Reuters.

Michael Balboa, a former portfolio manager at Millennium Global Investments Limited, was withal injuctively authorized by United States District Judge, Paul Crotty, in New York to forfeit $2.2m prosecutors verbalize he earned in the scheme and pay $390m in restitution over investor losses.

A jury in December found Balboa, 45, guilty of securities fraud, wire fraud, investment adviser fraud and two counts of conspiracy, after an earlier tribulation ended in a mistrial.

Due to the losses involved, Crotty verbally expressed advisory federal sentencing guidelines called for a life term. The judge verbalized the guidelines “vastly overstates the solemnness of the offence.”

Joseph Tacopina, Balboa’s lawyer, verbalized prosecutors had verbally expressed as a component of a proposed plea deal his client did not accept they would recommend a sentence of five years in confinement. Tacopina verbalized Balboa would appeal.

“He personally didn’t cause an investor to lose one dollar,” Tacopina verbalized in court.

The case centred on Millennium Global Emerging Credit Fund, which invested in emerging markets corporate and sovereign debt. The fund once reported $844m in assets, according to the US Securities and Exchange Commission.

Prosecutors verbally expressed Balboa, who ran the emerging credit fund from December 2006 to October 2008, inflated the value of illiquid warrants tied to Nigerian debt, in an effort to increment the ostensible performance of the fund and boost his emolument.

As a component of the scheme, which commenced in January 2008, Balboa injuctively authorized two co-conspirators to provide inflated values for the warrants to an independent valuation agent utilized by Millennium, prosecutors verbalized.

While the warrants in 2008 traded for no higher than $239, Balboa authoritatively mandated his co-conspirators to give the agent values of $525 to $3,500, prosecutors verbally expressed.

The inflated valuations resulted in the emerging credit fund’s own value to be overstated by about $80m as of August 2008, prosecutors verbally expressed.

Balboa that year earned $8.14m, with $2.2m derived directly from the scheme, the regime verbally expressed in a court filing last week.

The emerging credit fund shut down in October 2008. Charges by the US Justice Department and SEC were promulgated in 2011.