U.S. probes hit defunct energy co linked to Platinum Partners

By Markets Reuters

Copyright Reuters 2016

(Copyright Reuters 2016)

At least four U.S. agencies are investigating former officials of a now-bankrupt oil and gas company once majority owned by troubled hedge fund manager Platinum Partners, according to a legal filing submitted last week.

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In a motion filed with federal bankruptcy court on Nov. 23, a group of 10 directors, officers and employees of Black Elk Energy Offshore Operations LLC [BLCELB.UL] said an undisclosed number of them had incurred costs from investigations by the U.S. Attorney's office in Brooklyn, New York, the U.S. Securities and Exchange Commission, the Internal Revenue Service, and the U.S. Postal Service.

The men, some of whom have close ties to Mark Nordlicht's Platinum, filed the motion to request that Black Elk's insurance policies cover costs related to those investigations and potential settlements, in addition to lawsuits and claims by the Black Elk litigation trustee and others.

The Black Elk investigations are happening in tandem with U.S. federal probes into Platinum.

Spokespersons for the Department of Justice, SEC, USPS and IRS declined to comment or did not respond to emails seeking confirmation that the investigations are linked. A spokesman for Platinum declined to comment.

In June, the hedge fund's New York headquarters were raided by agents from the Federal Bureau of Investigation and the U.S. Postal Inspection Service as part of a Department of Justice (DOJ) probe.

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Platinum later decided to liquidate its main hedge funds under the supervision of a professional monitor amid pressure from the DOJ���s investigation, a similar probe from the SEC, and the earlier arrest of a longtime associate on separate criminal corruption charges.

Since then, Platinum���s main offshore hedge fund has received U.S. bankruptcy protection as Cayman Islands-based liquidators work to recover money and sell off its assets on behalf of creditors.

More recently, the trustee of a Black Elk litigation trust sued Platinum funds and employees on allegations they improperly transferred more than $200 million from Black Elk into its various hedge funds, effectively killing the Houston-based company.

The core of those allegations were described in a Reuters Special Report in April. (Read that report here: http://www.reuters.com/investigates/special-report/usa-hedgefunds-platinum/)

(Editing by Carmel Crimmins and Phil Berlowitz)