Freezing Order

Bill Browder moved to Russia to run a hedge fund, but he ran afoul of Vladimir Putin.

The son of a University of Chicago mathematics professor, the American-born Browder moved to Moscow in the 1990s to seek opportunities, at a time when the formerly communist nation opened its financial and commercial markets. In 1996, Browder launched a hedge fund named after Russia’s famed Hermitage Museum. His fund was successful because it found examples of corruption in Russian companies and then solicited media coverage of the scofflaws. The reforms that this name-and-shame approach spurred would send share prices higher.

But as Vladimir Putin consolidated power, calling attention to corruption became unacceptable. In 2005, Putin expelled Browder from Russia. Russian authorities seized Browder’s former companies and claimed $230 million in bogus tax refunds in their names. Browder’s lawyer Sergei Magnitsky, a 36-year-old Russian citizen, discovered the tax fraud scheme and accused two well-placed officials of perpetrating it. Magnitsky was arrested, held for nearly a year and then beaten to death while in custody.

Browder lobbied tirelessly...