Hedge Funds Accused of Financing Sex-Trafficking Conspiracy Involving Pornhub
Hedge Funds Accused of Financing Sex-Trafficking Conspiracy Involving Pornhub
In a shocking development, two hedge funds, Redwood Capital Management and Colbeck Capital Management, have been accused of participating in a sex-trafficking conspiracy by providing financing for popular adult websites like Pornhub. The allegations were made in a lawsuit filed by plaintiff Serena Fleites, who claims that at the age of 13, her boyfriend induced her to appear in videos that later ended up on Pornhub without her consent.
According to the lawsuit filed in Los Angeles federal court, Redwood and Colbeck provided hundreds of millions of dollars in financing to individuals who acquired and built MindGeek, the company behind Pornhub, Peeperz, YouPorn, and Brazzers. Fleites alleges that both funds were fully aware that the financing would be used to monetize child pornography and other nonconsensual content.
Spokespeople for Redwood and Colbeck have denied the allegations, stating that they had no control over MindGeek’s operations. Redwood’s spokesman mentioned that they divested their position in the company after learning of the troubling allegations in 2020. Colbeck’s spokesman clarified that they were lenders to the company over a decade ago, along with many other financial institutions.
Fleites, who was featured in a 2020 New York Times article highlighting underage content on Pornhub, has been seeking justice for the exploitation she faced. MindGeek, now rebranded as Aylo after being acquired by Ethical Capital Partners, entered into a deferred prosecution agreement with federal prosecutors in Brooklyn last year.
Both Redwood and Colbeck were founded by former Goldman Sachs Group Inc. alumni, with ties to the financial industry. The lawsuit alleges that the funds’ due diligence included reports flagging the risks of underage content, yet they continued to provide financing to MindGeek for the sake of profits.
The case, Fleites v. MindGeek, sheds light on the dark underbelly of the adult entertainment industry and raises questions about the responsibility of financial institutions in preventing exploitation. As the legal battle unfolds, the implications of these allegations could have far-reaching consequences for the hedge fund industry.