—US Prosecutors said to be moving closer to an indictment—

Louis MOORE Bacon, the Hedge Fund billionaire and his Moore Capital Fund LLC in New York are on the run as US prosecutors close in on an indictment based on their criminal investigation of one of the biggest insider trading scandals and frauds ever in the US, UK and Asian markets, the Wall Street Journal is reporting.

In recent months, Mr. Bacon has was successful in his “ruthless” push of a New York court to grant him access to private and confidential video tapes owned by Mr. Peter Nygard, the Canadian fashion mogul. Some have said that this was in his ongoing effort, along with his controversial mouth-piece Bahamian Attorney, Fred Smith, to overthrow the PLP Perry Christie Government in The Bahamas by levelling unsubstantiated claims of corruption.

Amazingly, Mr. Bacon and Mr. Fred Smith have put into those New York court proceedings, documents which they say are minutes of a high level and confidential meeting at the office of the Prime Minister. From those court documents, the purported minutes are said to prove the claim of corruption.

People who are listed as having been in attendance to that meeting have told the Bahamas National, that the thing which Mr. Bacon is relying on from the purported minutes never happened. While those attendees allege that those portions of the purported minutes are crucial to the claim by Mr. Bacon and Mr. Fred Smith of Save the Bays to deposing Prime Minster Christie from office, well-respected Bahamian Queen’s Counsel, Mr. Thomas Evans, Mr. Nygard’s local Attorney for the New York case and his lawyer in several Bahamian lawsuits, is reported as having posed a fundamental question of whether the minutes were lawfully obtained by Mr. Bacon and Mr. Fred Smith. Such a document ought not to have been possessed by them because it relates to confidential meetings hosted by the Office of the Prime Minister. Mr. Evans said that as the content of such minutes would have been subject to the provisions of the Official Secrets Act which strictly prohibit any civil servant from divulging the secrets of the government or any confidential information to the public, he would not be surprised if Bahamas law enforcement agencies have launched an investigation as to how Mr. Bacon and others would have obtained the minutes that they exhibited in the New York proceedings.

As a result, Bacon is now in the sweat box as a petition is reportedly being galvanized to have him escorted out of The Bahamas because “…he is believed to be preparing to hide in The Bahamas as the insider trading scandal noose tightens,” says a locally trained economist who spoke on the condition of anonymity.

The WSJ reports that the investigators are pursuing a hot trail after being tipped by a senior HSBC trader that in 2010, Mr. Bacon’s Hedge Fund improperly obtained confidential information about HSBC’s client – Prudential Insurance, a major UK insurer – as it organized for a major HSBC transaction.

According to the WSJ, HSBC helped Prudential sell “billions of pounds (Sterling) and buy billions of dollars to finance the Insurer’s acquisition of AIG and its Asian Life Insurance portfolio”.

The WSJ said “a senior HSBC trader alerted” the authorities that a “trader at Moore Capital Management” was leaked the information on the transaction, which is a serious offence.

The authorities have been conducting their probe for over three years and already six banks including HSBC have been fined a total of $4.5 Billion for failing to stop their traders from trying to manipulate the $5 trillion per-day foreign exchange market.

Citing that criminal charges are imminent, the WSJ said US prosecutors will travel to London this week to interview traders as an indictment nears.

Mr. Bacon has been embroiled in major litigation in The Bahamas with Mr. Nygard for several years where Mr. Bacon was found to have unlawfully altered Mr. Nygard’s easement roadway in an effort force Mr. Nygard to sell to him, his (Nygard) Mayan themed mansion thereby leaving Mr. Bacon as the sole property owner of more than 11 acres of land on the most western tip of Lyford Cay peninsula, according to documents filed in that court action.
Bacon threw a new curve ball into the field two years ago when he masterminded an organization called “Coalition to Protect Clifton Bay” (aka “Save the Bays”) now headed by Mr. Fred Smith., Mr. Smith is the lawyer behind several Judicial Review applications Bacon has brought before Justice Rhonda Bain of The Bahamas Supreme Court in relation to a pending decision by the Government of The Bahamas on an application by Mr. Nygard to rebuild his home at Lyford Cay; which was destroyed by a mysterious fire in 2009 and for the grant of a formal lease of the seabed on which there has been natural accretions to the property of Mr. Nygard.

Mr. Bacon has also used strong arm tactics with the deployment of Schillings, his UK attorneys to muzzle the local Bahamian press about publishing information about his illegal dredging of his property and the seabed in order to construct what has been described as a “smuggler-type boat basin” underneath his house and away from public eyes as other boat basins are constructed when the owners follow the law. The FNM Hubert Ingraham Government, with Mr. Michael Major, Director of Physical Planning, is said to have “backdated” a permit to give an appearance that Mr. Bacon had followed the law.

A Bahamian journalist who spoke on the condition of anonymity said that on the basis of his investigation, Mr. Bacon’s use of Shillings to shut down media that want to report matters about him that he does not want reported is of public interest in The Bahamas. Indeed, several other journalists are being sued by Mr. Bacon for reports that he has alleged are libelous.

According to informed legal observers who also spoke on the condition of anonymity, they “…believe[d] that Schillings again tried to strong arm the WSJ from breaking the news on the investigation to the world, but seems to have met their match.

International news wire services which are carried by the local newspapers in The Bahamas have reported on the WSJ story about the criminal investigation but to date neither The Tribune, Nassau Guardian or Freeport News have published the story.

The Wall Street Journal is considered the foremost journalistic product on financial services, money markets, the stock market, business, commerce and the economy in the USA.


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Keod Smith - Keod Smith

Keod Smith is a Barrister in The Bahamas practicing at Commercial Law Advocates, Trinity Place Nassau.

He served as a Member of Parliament for 2002 – 2007 and as Ambassador for the Environment and Chairman of the BEST Commission from 2002 to mid 2006.

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