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(Article from Registered Funds Regulatory Update, January 2023)

For more information, please visit the Registered Funds Resource Center.

On December 20, 2022, a federal jury ordered David Bodner, co-founder of hedge fund, Platinum Partners, to pay $8.2 million into the fund’s bankruptcy liquidation for breach of fiduciary duty. Bodner’s trial opened on November 30, 2022, with the liquidators alleging that Bodner was aware Platinum co-founder Mark Nordlicht inflated the value of assets in the fund and did nothing to counter the scheme because his fees rose in parallel to the increased valuations. However, Bodner testified that he had a limited role at the fund with no control over its valuation. 

Jurors reported that they were deadlocked on December 19, but were able to reach agreement after the judge encouraged them to seek consensus. The verdict was a small fraction of the $50 million sought by the fund's liquidators.

Verdict Form: Martin Trott and Christopher Smith v. David Bodner (Dec. 20, 2022),
No. 18-cv-10936 (JSR) (S.D.N.Y.).