N.I.R. Group investors scored a big win in the Cayman Island’s civil court this month. Corey Ribotsky will now have to answer to a court appointed independent liquidator for the Master fund who says the first order of business is an investigation into how Ribotsky has been managing cash flow and investment valuations since the fund was restructured in late 2008. The news was first reported Tuesday for DealFlow Media.
On June 1st, PriceWaterhouseCoopers wrestled control of the AJW Master Fund II liquidation from KPMG. As I previously reported, KPMG was gung-ho on keeping Ribotsky as the manager of the fund during the liquidation. Offshore feeder fund investors didn’t like this, so by some miracle they got a Cayman Islands judge to rally a vote amoung all investors to remove KPMG for conflicts of interest with N.I.R. Group–and they won. PWC told The PIPES Report they’ll be working for investors’ interest and if they want Ribotsky out as manager then he’ll get the boot.
Investors in the onshore feeder fund tell me they haven’t received performance numbers from Ribotsky since January and very little transparency has been offered regarding the current net asset values. But with PWC on the case now it looks like the kimono will finally be opened and a long time accounting of the funds real asset value will be front and center.
Last week the FT reported the SEC is now investigating N.I.R. Group for their role as collateral manager in the toxic Norma CDO that was allegedly designed for hedge fund Magnetar to make millions shorting. I advanced the news this week reporting for The PIPES Report, the SEC is also looking at Ribotsky for buying credit default swaps against the CDO he was hired to pick collateral and manage. Talk about the ultimate insiders game.
You can buy a single copy of the report on what PWC plans to do with the NIR liquidation and more news on the SEC investigation here.