A federal bankruptcy court judge on Thursday appointed an interim trustee as part of an effort to recover money for investors in a fund run by the late Rick Siskey.
Siskey took his own life Dec. 28, a week after court filings gave the first public indication that he was under investigation for fraud allegations. An FBI affidavit unsealed in January alleged he was operating a Ponzi scheme and that more than 100 investors could be out as much as $19 million.
During a hearing Thursday, attorneys involved in the case indicated that the Securities and Exchange Commission is investigating and still could get involved in helping investors.
Charles Monnett III, a Charlotte attorney representing several investors, said in court that it’s not known how much is owed investors but that he expects it will be more than $19 million. While the FBI affidavit focused on a fund called TSI Holdings, Siskey also operated other entities, he noted.
In a court filing Wednesday, Siskey’s widow, Diane, voluntarily committed to set aside $37.5 million of the $46.94 million in life insurance proceeds she has received for investors and other creditors.
At the hearing, Monnett said it’s unlikely TSI has any assets of its own, saying he doesn’t believe the fund is “anything more than a piece of paper.”
“The primary question is what happens to the $46 million (in life insurance proceeds)?” he said.
Attorneys for Diane Siskey have said she was not involved in her husband’s fund and is cooperating with authorities. At the hearing, one of her attorneys, Thomas Walker of Alston & Bird, said he believed it would be “more effective” if the SEC assumed a role in the case.
So far, the SEC has issued subpoenas, and Alston & Bird is holding records for the agency, said attorney Matthew McGuire, who is representing Diane Siskey with Walker. An SEC spokesperson declined to comment.
In the meantime, U.S. bankruptcy court Judge Craig Whitley appointed Joseph Grier of the Grier Furr & Crisp law firm as an interim trustee in the case, and the judge scheduled another hearing for later in the month.
After Thursday’s hearing, Monnett said it was helpful to have the court involved. “It gives people some measure of assurance that things are being done properly,” he said.
Other attorneys representing investors were also in the courtroom and did not object to the trustee appointment. The U.S. Attorney’s Office in Charlotte also expressed no objection.
One investor who did not want his name used to protect personal financial information said he is confident that Diane Siskey will do the right thing and pay back investors. He said he hopes that the legal maneuvers in the case won’t slow up repayment.
Rick Rothacker: 704-358-5170, @rickrothacker
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