Are the Feds getting closer to nailing NIR Group for stock kickback scheme?

February 26th, 2010
| More
Contributed by: Teri Buhl
A Long Island hedge fund is back in the news today with new allegations that Feds are looking into. According to the Wall Street Journal, NIR Group, run by Corey Ribotsky, is now cooperating with federal authorities over allegations that it paid kickbacks to stock promoters as part of a scam to inflate the value of its holdings.

News of trouble at NIR Group was first reported by Nathan Vardi at Forbes, who highlighted a mafia-style drama between Ribotsky and one of his investors, Gerald Tucci, who sent tough guys to threatened Ribotsky after they realized the assets under management they were paying fees onwere not the real value of the fund and demanded a redemption. In the Forbes story, Ribotsky claimed that his fund has an outside valuations expert, WTAS, that verified the assets, but a few days later Dealbreaker broke the news that the valuation firm was actually not working with Ribotsky any longer and wouldn’t verify if the asset values were correct. Last summer we first learned that the SEC was investing the fund, based on a Dealbreaker report, and then the WSJ got wind the Brooklyn DOJ was also looking into investor fraud at NIR Group.

Now, eight months later, the WSJ brings NIR Group back into the news cycle with no details of which stock — or which of the penny-scam promoters — the DOJ is looking into for kickbacks allegedly paid by Ribotsky’s fund. First of all, we can verify that Brooklyn Assistant U.S. Attorney Winston Chan is indeed investigating NIR and has been for nearly a year (he even has a grand jury sitting), but no charges have been filed yet.

To read Teri Buhl's complete article in the Greenwich Time, please click here.
Related Article Tags: Hedge Fund Fraud and Ponzi Scheme News; Hedge Fund Resources and Featured Partner News


More Recent Headlines

Hedge Funds Titans Bet Big Against the Euro

Odey Asset Management Terminates Asia Fund

Och-Ziff veteran Frank Yu launches Themes Investment Management

Activist Update: Clinton Group & Spotlight Capital speaking with Red Robin Gourmet

Nikko Asset Management to launch Green Fund with World Bank

Update in Florida Fund Manager Fraud: Nadel Pleads Guilty

Moore Capital impedes Trading Emissions and Leaf Clean Energy merger plans

Maverick Capital’s Lee Ainslie reviews 2009 and looks ahead to 2010

Scott Galloway, Harbinger Capital’s representative, to step down from New York Times Board

Carl Icahn eyes Biotech leader Genzyme Corp