Bellator Investor Subject of FBI Investigation

September 22, 2010

According to a report published by Fortune Magazine, Plainfield Asset Management (PAM) is the subject of a FBI investigation concerning allegations of fraud:

The Federal Bureau of Investigation is probing whether Plainfield Asset Management, a hedge fund that once had $5 billion in assets under management, committed fraud by overstating the value of some of its investments and charging management fees based on those inflated assets.

The firm was profiled by the magazine in January in a piece entitled: “The Fall of a Hedge-Fund Wunderkind

Payout Perspective:

MMAPayout.com has confirmed PAM’s status as Bellator’s majority shareholder. According to an SEC filing on February 26, 2010, Plainfield Direct, an investment fund managed by PAM, holds a 51.6% majority stake in Bellator Sports Worldwide LLC. The common stock position represents an investment of roughly $2.25M. As of the date of the filing, Plainfield also held nearly $2.92M in senior debt.

In 2009 Bellator CEO and Founder Bjorn Rebney told MMAPayout.com that Bellator had met all of its capital requirements with the backing of “hedge funds,” but declined to provide any specifics.

Chris Carey of ShareSleuth.com contributed to this report.

12 Responses to “Bellator Investor Subject of FBI Investigation”

  1. Bellator Investor Subject of FBI Investigation - Sherdog Mixed Martial Arts Forums on September 22nd, 2010 7:33 PM

    […] The Federal Bureau of Investigation is probing whether Plainfield Asset Management, a hedge fund that once had $5 billion in assets under management, committed fraud by overstating the value of some of its investments and charging management fees based on those inflated assets. read more… Bellator Investor Subject of FBI Investigation : MMAPayout.com: The Business of MMA […]

  2. jv on September 23rd, 2010 9:13 AM

    There has been a long history of sports franchises being owned by people who made their money the old fashioned way. They stole or swindled it. A sports franchise seems to be the ultimate accesory for people driven to do those kinds of things.

    Some thing to keep in mind here is that the money is actually coming from one of the funds and not the manager of the hedge fund. No one in the US goes to jail for stealing millions. You go to jail for stealing minor amounts. The rich just pay fines. So what kind of relief do the investors get beyond suing the manager?

    But my guess is that if the SEC or FBI manage to make a case stick then the SEC would some how allow the hedge fund to be wound down and the investors to be able to get their money out. But then again maybe they just hire a new manager for the fund.

    The Bellator investment appears to be a minor part of the fund. Liquidating Bellator is unlikely to result in much money but it would stop the bleeding they must be experiencing. I certainly don’t see further investment by this fund in Bellator’s future. It will be interesting to see this play out.

  3. Ryan Edwards on September 23rd, 2010 12:16 PM

    Just looking at the bellator shows, they have to be losing 10 million dollars at least in 2010,and how about 2009, so someone (investors) are taking the hit!!!!
    I also understand that a Plainfield Asset Management executive travels with Bellator or actually works for Bellator….very interesting.

  4. Bellator’s main investor being investigated for fraud | Caged Insider on September 23rd, 2010 3:24 PM

    […] MMAPayout, Fortune Magazine This entry was written by Joe Rocha, posted on September 23, 2010 at […]

  5. On heels of upcoming big fights, Bellator finds themselve under scrutiny | FightOpinion.com – Your Global Connection to the Fight Industry. on September 23rd, 2010 5:41 PM

    […] MMA Payout has a report claiming that the FBI is investigating the alleged main financial backer of Bellator. Read the […]

  6. Steve Swyhart on September 23rd, 2010 7:02 PM

    I disagree – I think that Bellator is next in line to the UFC – they’re televised nationally and they offer an entertaining MMA product in comparison to the competition. There fighters are quite skilled and there staff outshines that of Strikeforce with what seems to be a more polished expertise. Overall they have to be 2nd in the states when it comes to MMA outfits!

  7. jv on September 24th, 2010 2:43 PM

    >”Overall they have to be 2nd in the states when it comes to MMA outfits!”

    By what measure?

    Gate? They draw in the hundreds for some shows.

    TV Viewership? They won’t put up the numbers which is telling in it’s self. But the fact that no one knows when they are on has got to be a real problem.

    Fighters? Your kidding right?

  8. Does Bellator get the respect it deserves? - Page 2 - Sherdog Mixed Martial Arts Forums on October 16th, 2010 8:01 AM

    […] with 2500 in Kansas City. Add to that the fact that their main financial backer is in trouble. Bellator Investor Subject of FBI Investigation : MMAPayout.com: The Business of MMA __________________ Fav. Fighters Quinton Jackson Matt Serra Yoshihiro Akiyama Norifumi […]

  9. jj on October 21st, 2010 8:24 AM

    i think youre trying to make less of bellator than they actually are jv

    bellator has a great product. they have a great highlight reel from all the events theyve been putting on that any promoter should be jealous of. their production is well done, the commentators are knowledgeable and work together much better than what strikeforce is offering. if youre telling me youre not interested in seeing eddie alverez vs roger heurta tonight, then i’m second guessing your appreciation for mma as a whole.

  10. Kevin L. Wiley on October 31st, 2010 12:22 PM

    It’s pretty obvious to me their live shows are Thursday nights on FSN (regional times vary due to local sports commitments.) If you miss them you can easily catch the replay.

    Bellator isn’t trying to have ticket sales as the largest part of their revenue stream. They are trying to build a television following which I think they are slowly building.

    Their production quality is excellent, and I love the venues they have cards in.

    I am not sure of their financial standing, but their television standing in my opinion is much better than strikeForce as far as the eyes that can watch.

  11. Dear Bellator, Care of: Bjorn Rebney - Sherdog Mixed Martial Arts Forums on November 5th, 2010 9:45 AM

    […] Do you really believe, that Bellator is doing great right now? Who would give them 40 million $ without pulling the plug at one point? Btw. their main investor is in deep trouble right now: Bellator Investor Subject of FBI Investigation : MMAPayout.com: The Business of MMA […]

  12. The Bellator Soap Opera: A Summary » MMA HQ – Mixed Martial Arts News and Analysis on November 12th, 2010 1:11 PM

    […] low gate numbers and high costs. And at the end of September, MMA Payout reported that one of Bellator’s investors, Plainfield Asset Management, was the subject of an FBI investigat… concerning allegations of fraud. According to MMAPayout, Plainfield Asset Management is […]

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