FSA fines hedge fund chief £3m who hid losses

Alberto Micalizzi, chief executive of London-based Dynamic Decisions Capital Management (DDCM), was yesterday handed the fine by the Financial Services Authority. The regulator accused Mr Micalizzi of lying repeatedly to investors after DDCM lost more than $390m (£223m), or 85pc of its value, in the months following the collapse of Lehman Brothers in September 2008. Instead of telling investors of the losses, Mr Micalizzi – a former professor finance at Milan’s prestigious Bocconi University, the alma mater of Italian prime minister Mario Monti, who also once taught economics there – is alleged to have created artificial profits by recognising gains on a bond that was bought for substantially less than it was worth. As the scale of the losses grew, Mr Micalizzi, working in concert with two companies only identified as 'Company A’ and 'Company B’, bought and sold back parts of the bond to artificially offset the collapse in the fund’s value. In total, $418m of profits were created through a series of transactions with Company A, which was set up in 2007 and was described as having “no identifiable track record in the financial services or commodity trading industries”.