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2002 World Series of Poker main event winner Robert Varkonyi is suing a New York hedge funds demanding they return his $1.4 million investment. He and his poker playing wife, Olga, filed the suit earlier this month against Chetan Kapur and his hedge fund, ThinkStrategy Capital Management. The investment was tied to a Sarasota, Florida Ponzi scheme managed by Arthur Nadal, the couple claim.
According to the 42-page complaint filed in New York state court in Mineola, Varkonyi alleges that his investment in Kapur’s TS Multi-Strategy Fund may be “decimated” by the improper liquidation of the hedge fund that began in November. Varkonyi and his wife claim they are “entitled to a return of their investments.”
Varkonyi, who used to work for Goldman Sachs, exemplifies the growing connection between Wall Street and poker. But even for Varkonyi, who did not respond to requests for comment, the association between Texas Hold ‘em and high finance does not always mix very well. While hedge fund manager David Einhorn placed 18th in the World Series of Poker’s main event in 2006 and Aaron Brown, a former poker pro, now works as a risk manager for hedge fund firm AQR Capital Management, sometimes navigating successfully between the poker and investing worlds is not so easy.
The poker champ also noted that he invested funds in Class A and Class B hedge funds.
Varkonyi says in his complaint that the asset swap between the Class B and Class A shares of Kapur’s hedge fund was done “with the intent of harming the Class B limited partners and benefitting KBC Financial.” He claims he was led to believe the hedge fund’s Class B units would be unleveraged investments and that KBC Financial had no recourse to the assets underlying those units.
Kapur’s attorney would not speak with Forbes.com about the case. KBC Financial said it’s “confident in this case that the bank has done nothing wrong.”
- Aaron Goldstein, Gambling911.com
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