The source who said the SEC was investigating the firm also said it would remain in business despite the gradual liquidation of the Platinum Partners Value Arbitrage Fund and the Platinum Partners Credit Opportunities Fund. The two funds contain the large majority of Platinum's assets, about $1.35 billion as of April.
The source declined to be identified because the information is private.
"Bart Schwartz will play a key role in ensuring that investors' best interests are served as we monetize the funds and meet redemptions," Platinum said in an emailed statement. "His standing with the investment community, regulators and law enforcement is beyond reproach and we're very pleased to have his assistance."
Schwartz was chief of the criminal division in the Department of Justice's Southern District of New York and more recently worked as the appointed receiver of hedge funds run by J. Ezra Merkin that invested in Bernard Madoff's Ponzi scheme and a compliance consultant for the Department of Justice to monitor Steven Cohen's Point72 Asset Management.