Banker Frederic Marino fights firm he founded over corruption charges
London — Nine years and one revolution after agreeing to manage more than $620m of Libyan funds, a London banker is in court fighting the firm he founded, and defending fees he used for a lifestyle that included a £165,000 stay at a five-star hotel in the British capital.
Frederic Marino is accused by FM Capital Partners of taking more than $16m in secret commissions between 2009 and 2014, seeking and sharing bribes and of abusing his position as one of the directors of the firm. Marino denies the allegations, saying the money given to him for trades made outside the fund were "standard market practice", according to his court filings.
FMCP alleges Marino and a former Julius Baer banker, Yoshiki Ohmura, conspired to improperly funnel money to themselves from the Libya Africa Investment Portfolio — a Libyan sovereign wealth fund. They gained commissions on long-term investments and shorter structured trades and then failed to disclose their actions to the company that Marino founded, effectively depriving the fund of the money, it alleges.
There was "no sensible commercial rationale" behind entering into the structured products, Nathan Pillow, FMCP’s trial lawyer, asserted during his questioning of Ohmura Monday. The only reason for the trades was to "line your own pockets, with Mr Marino," he told Ohmura, who denied the allegations and insisted there was commercial benefit in the products.
The corruption of the defendants "was motivated by and resulted in their personal enrichment on a grand scale," lawyers for FMPC said in court filings. "As they knew, their gains came at the direct expense of the very assets that FMCP was supposed to be protecting."
Lawyers for Marino accused FMCP of trying to retrospectively "move the goalposts" and take fees that rightfully belong to him.
"It’s shocking how greedy FMCP is, trying to rewrite history to get to Marino’s money," the banker’s trial lawyer, James Couser, told the London court last week. Marino also said the fund has subjected him "to continuous vilification" and treated him "like a criminal," his court filings show.
Lawyers for FMCP, Marino, and Ohmura did not respond to requests to comment, while Julius Baer declined to comment.
The case against Marino has been split into two parts, with the first trial dealing with accusations of bribery and conspiracy. The next phase addresses FMCP’s remaining claims, which include Marino’s alleged loss of $46m and his misuse of funds for personal expenses and for the benefit of his relatives and friends. Marino’s wife and nephew were named in the case but the allegations against them were dropped.
Marino allegedly racked up expenses on a company credit card for a helicopter ride, clothes and restaurant bills. He also spent £165,000 at the five-star Lanesborough Hotel, including £42,000 on parking, according to the lawsuit filed in December 2014.
London-based FM Capital Partners was incorporated in July 2009 shortly after Marino met with the then-deputy CEO of the LAP, Abdulfatah Sharif, in Libya. The LAP is itself a unit of the country’s larger Libyan Investment Authority. Marino arranged for FMCP to advise on and manage $620m of LAP’s assets from London, according to FMCP’s court filings.
FMCP claims that between 2009 and 2011, Marino, Ohmura and another FMCP director took secret commissions on investments made into products sold by Bank Julius Baer. It alleges Marino filtered the fees through his private offshore companies — Ironfly and Leopard — while Ohmura received fees into Conquest, a company he established in 2009 after leaving Julius Baer.
After the Libyan revolution in 2011, the LAP began an investigation into FMCP’s handling of its assets and complained about the firm’s failure to look after its interests. By September 2014, Marino was suspended and found to have transferred £2.5m into his former wife’s bank account in Norway, money FMCP was able to trace back to Ironfly.
In October 2014, Marino’s former lawyers advised him to send a "whistle-blowing" letter to the UK’s Financial Conduct Authority detailing seven payments said to have been "undeclared" to FMCP or LAP. FMCP says the letter is a confession of Marino’s wrongdoing.
But the correspondence was sent when Marino was being treated in a hospital in Norway for "severe mental illness," his filings say. Marino’s current lawyers deny it is an admission of guilt and argued it was a lawyer’s interpretation of events "based on incomplete information and misconceptions, which he (Marino) was ill-situated, at that moment, to do anything to correct," according to his filing.
Marino’s lawyers said he struggles to describe the events leading up to sending the missive. Indeed, talking about events surrounding the court case has proved difficult in general. The London court adjourned three times last week to allow Marino to decide whether or not to testify.
Marino eventually elected not to take the stand after "struggling with a difficult decision", Couser told the court.
The Phase I trial is expected to end March 28.