Forensic accounting and examination of due diligence in investor fraud dispute
Brattle was retained by investors in a hedge fund who alleged that the management of the hedge fund engaged in deceptive round-trip transactions that hid the fund’s losses from investments in Ponzi schemes associated with related parties. Brattle supported two experts. An accounting and auditing expert performed a forensic analysis of the round-trip transactions and opined how the hedge fund used them to fool its auditors. A hedge fund industry expert explained that the fund did not perform due diligence in accordance with the customs and practices of the industry and how its investments did not align with the fund’s disclosures about the strategy of the fund. The matter resulted in a total win for the Brattle’s clients in private arbitration.
