Wall Street Scion’s Fraud Case Could Be Settled, Lawyer Says

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Andrew Caspersen, center, outside federal court in New York last month. Credit Lucas Jackson/Reuters

Andrew Caspersen, the former Wall Street executive charged by federal prosecutors and securities regulators with defrauding friends, relatives and a charitable foundation closely tied to a large New York hedge fund, is unlikely to face a trial.

A lawyer for Mr. Caspersen, 39, who was arrested a little more than two weeks ago and is now hospitalized in Manhattan, told a federal judge on Wednesday that the criminal case against his client would probably be resolved within the next 60 days.

“It doesn’t cry out as a triable case,” said Paul Shechtman, a recently hired lawyer for Mr. Caspersen, the son of a wealthy financier, whose case has been the talk of much of Wall Street for weeks.

Mr. Shechtman made his comments during a brief morning hearing in a related fraud lawsuit filed by the Securities and Exchange Commission. Mr. Shechtman told Judge Richard M. Berman of Federal District Court in Manhattan that he anticipated reaching a settlement with securities regulators but was “loath” to enter into any agreement before the criminal case “resolves itself.”

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Fraud Charges for Financial Executive

The S.E.C. said that Andrew Caspersen, a partner at Park Hill, solicited $95 million to invest in a shell company.

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Speaking after the hearing, Mr. Shechtman declined to use the word “plea” to describe the anticipated resolution with federal prosecutors working for Preet Bharara, the United States attorney for Manhattan. But he reiterated that a trial was unlikely.

Mr. Shechtman recently signed on as Mr. Caspersen’s lawyer, succeeding Daniel Levy, the lawyer who appeared at his bail hearing on March 28.

Federal authorities accuse Mr. Caspersen, who until recently worked for the Park Hill Group, a division of PJT Partners, of engaging in a brazen scheme to defraud investors out of as much as $95 million.

An internal investigation by PJT Partners concluded that the amount of money Mr. Caspersen actually took in from investors was about $40 million, of which $14 million came from friends and relatives.

The single largest investor in Mr. Caspersen’s apparent fraudulent scheme was a charitable foundation linked to Louis M. Bacon’s hedge fund and investment firm, Moore Capital Management. Last November, the foundation invested nearly $25 million with Mr. Caspersen, who had convinced investors he was working on deals to raise money for clients of Park Hill Advisors, which works with private equity firms and hedge funds.

The PJT internal investigation found that Mr. Caspersen began soliciting money from investors for his unauthorized investment vehicles in late 2014. His apparent rogue activities continued right up until his arrest.

Federal authorities said at least half of the money Mr. Caspersen took in from the Moore foundation was lost by Mr. Caspersen on aggressive stock options trading in a personal brokerage account.

Two days ago, a federal magistrate approved a request by federal prosecutors to make some minor adjustments to the terms of the $5 million bond that Mr. Caspersen had agreed to post. The letter from prosecutors requesting the bail adjustme
nt noted that Mr. Caspersen remained “hospitalized in a secure unit” in a Manhattan hospital.

As part of his bail, Mr. Caspersen was ordered to receive mental health evaluation and potential alcohol treatment. His $5 million bond is secured by the more than $3 million home that Mr. Caspersen and his wife, Christina, own in Bronxville, N.Y., and $1 million in cash.

The couple, who have two young children, also own a co-op apartment in Manhattan.

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