Former Weavering boss could face up to 10 years in jail

Magnus Peterson, the boss of collapsed UK hedge fund Weavering, could face up to 10 years in jail after being found guilty of fraud.

On Monday, after a 12-week trial, a London court found Swedish-born Peterson guilty of eight counts of fraud, false accounting, forgery and fraudulent trading over a six-year period, which cost investors £354.3m.

The 51-year-old, a former interest and foreign exchange trader, will be sentenced on 23 January, the Serious Fraud Office (SFO) said in a statement.

Peterson, who promoted his fund to wealthy and institutions as a low-risk investment offering stable returns, was found guilty of disclosing trading losses via a sophisticated system of deception, which came crashing down six months after the collapse of Lehman Brothers in 2009.

According to the SFO, Peterson artificially inflated his fund’s investment performance and deceived investors to pour $780m in the Weavering Macro Fund over a six-year period, while paying himself £5.8m between 2005 and 2009.

"Whilst Mr Peterson knew full well what the true value of the fund was when it collapsed, his investors did not,” the SFO said in the statement.

"To them, the extensive losses they suffered came as a complete shock."