PwC Says NIR Group Doesn’t Have Access to Dealer Market

NIR Group hasn’t had access to the broker dealer market since February. I reported this nugget of news last week for DealFlow’s The PIPEs Report after investors in the AJW Funds explained this is what court appointed Cayman Islands liquidator, PwC, is now telling them.

If NIR founder, Corey Ribotsky, knew clearing firms and broker dealers wouldn’t sell the hedge fund’s penny stock investments back in February then why didn’t he tell onshore or offshore investors this when he notified them the funds were going into liquidation at the end of March? NIR Group letters show the fund was asking investors to keep Ribotsky-owned First Street as the collateral manager during the liquidation. But if the market wasn’t willing to work with Ribotsky then how could he execute (and get paid fees) the liquidation strategy, which calls for converting the defaulting loans in the AJW funds to stock and selling them on the OTC market to get cash back for investors?

In early October, two people who had spoken with NIR managing director Bobby Cohen said he was telling possible buyers of NIR Group notes that the fund can’t legally convert right now. The SEC confirmed for me they’ve placed no restriction on NIR’s ability to convert or sell stock. So I ran Cohen’s statement by the NIR’s outside attorney Brad Gerstman who said that’s not true and insisted NIR was selling notes for minimal cash down because that was the best liquidation strategy to maximize value for investors. Yet, a month latter I see emails from PwC detailing a very different story. When I brought this to Gerstman attention he was tongue tied, said he’d get back to me with a response, and then never followed up. Meaning either NIR misled their attorney or Gerstman went on the record with a statement that didn’t explain what was really going on with NIR’s ability to liquidate fund assets.

If you want to understand why the market is shunning NIR Group you can buy the DealFlow story here.

While many investors are frustrated with the lack of transparency from NIR Group, offshore investors scored a small win in the last few weeks. Ian Stokoe, the PwC joint liquidator for AJW offshore II and Master Fund II told me yesterday PwC has now obtained liquidator control of the original Master Fund and AJW offshore I. I’d previously reported for DealFlow that PwC could have problems selling assets in Master Fund II because the assets had not been properly transferred from the first Master Fund to the 2008 restructured Master Fund II. Legal filings in the Cayman Islands show the old funds were voluntary assigned to PWC and not court appointed. This means the assignee, Ribotsky, could also take back control of the fund if PwC does something with the notes that Ribotsky doesn’t like. Investors in the AJW funds have said Ribotsky controls the majority voting rights of the Master Fund after he reinvested fees earned during the funds go-go years. Fees the SEC lawsuit alleged were obtained by Ribotsky lying to investors about the value of the assets in the fund.

Ribotsky is still the legal liquidator for the AJW onshore funds; funds that are packed with main street investors who got into the fund through an IRA or a broker selling the NIR Group investment idea for the firm. Jim Nail, a former professional money manager and investor in the AJW Onshore fund has posted a call out to fellow onshore investors asking to group together, like the offshore investors did, and take legal action to get a New York court to assign an independent liquidator or trustee.


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  1. I have lost a huge portion of my retirement in the NIR fund, AJW Offshore. Corey Ribotsky seems to be doing well and I need to contact him regarding my losses. I need Corey’s phone or email address. Help!

    • Walter I don’t have a phone number for Corey as he has never agreed to an interview. As far as Corey doing just fine he still fighting an SEC fraud suit, his wife divorced him, and PwC kicked him out of his hedge funds and stopped fees going to him.

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