Nordlicht has also maintained ties to associates with troubled pasts. Kevin Cassidy, who has served time in prison three times for fraud and tax evasion, is now a sales executive at Agera, the Platinum-owned power supplier. Murray Huberfeld, a financier who was ordered to disgorge profits and fined for violating securities laws at his Broad Capital, provided Platinum with start-up money and ran Nordlicht's credit-focused hedge funds until Platinum took them over in 2011. He no longer works at Platinum but remains a client, according to 2014 tax filings for his charitable foundation.
Cassidy and Huberfeld did not respond to requests for comment.
The person familiar with Platinum's history said that the firm has made thousands of investments and that in the few cases that generated negative attention, Platinum was duped by deceptive business partners.
Strategies And Schemes
In an episode that attracted media attention in 2014, the U.S. Securities and Exchange Commission found that Platinum subsidiary BDL Group invested more than $56 million in a scheme operated by two brokers at other firms who exploited the terminally ill.
Patients in nursing homes and hospice care were gulled into providing personal information in order to receive a box of candy or a $250 gift; that information was used by the brokers to purchase long-term variable annuities that paid benefits to investors like BDL when the patient died soon after, according to the SEC.
BDL paid a combined $3.29 million profit disgorgement and penalty on the grounds that it made money on an illegal scheme. The two brokers at the heart of the operation were forced to repay their profits; one's case is on appeal with the SEC.
Nordlicht's friend and former colleague, Howard Feder, ran BDL and worked with the brokers to fund their strategy, according to the SEC. In a 2014 settlement with the agency, Feder was barred from the securities industry and paid a penalty of $130,000. At the time, the agency said Feder "understood the key components of the investment strategy."
The person familiar with Platinum's history said the firm was not aware that the brokers were engaged in illegal activity.
Feder did not respond to a request for comment.