Arrowhead, Execs Face SEC Suit Over Petters Scheme

Law360, New York (November 9, 2011, 6:33 PM EST) -- The U.S. Securities and Exchange Commission sued Arrowhead Capital Management LLC and two of its former top officials on Wednesday in Minnesota, claiming they funneled over $600 million of the hedge fund's assets to now-imprisoned Thomas J. Petters' $3.7 billion Ponzi scheme.

The regulator claims that Arrowhead former President James Fry and former managing director Michelle Palm, who were also criminally charged in connection with Petters' scheme, falsely assured investors that the flow of their money would be safeguarded by the operation of certain collateral accounts....
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