New York (HedgeCo.Net) – While the aftermath of the collapsed Bayou hedge fund may have left investors with nothing more than shock, the U.S. Marshals are trying to recoup some of the losses that were suffered.  By selling Bayou’s failed investments, they are recovering some $115 million from the fund that once squandered over $300 million.

"You can’t believe some of the stupid investments these people made,” said Leonard Briskman, Deputy Chief for Business Management for the U.S. Marshals in an interview with Bloomberg. “The Bayou guys lost money during the late ’90s when almost everybody was making money in the market without even trying.”

Briskman is in charge of heading Bayou’s liquidation sale, in what has become a much more prominent role for the Marshals service with the rise of white collar crimes.

Investments aren’t the only thing being liquidated, however.  U.S. District Judge Colleen McMahon ordered Israel to turn over his scooter and RV, the same vehicles that aided in his escape the day he was supposed to report to prison to start serving his 20 year sentence.

Also up for bid is the Tiffany & Co. watch that Israel was wearing.  These things will help go towards the $150 million in restitution that he has been ordered to pay.

The U.S. Marshals Service is currently running a portfolio estimated at $1.7 billion that include 30 businesses.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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Tags: april-29, brokerages, chief-executive, due-diligence-service, federal-district-court, financial-services-authority, liquidators, rout, shareholder, us-marshals-service

New York (HedgeCo.Net) – Disdained investors of the former Bayou hedge fund, run by one-time fugitive Sam Israel, are going after Goldman Sachs for $20 million to try and recover some of their losses.

Goldman Sachs served as the prime broker while clearing trades and taking custody of the securities.  They also provided reports on the hedge fund’s investments.  Reports that some say should hold them partly accountable for the $450 million that was duped out of trusting investors. 

The suit, which was filed as a private arbitration case in Federal Court, claims that Goldman Sachs Execution and Clearing provided monthly statements to Bayou highlighting its losses.  The reports showed more than $88 million between August 1999 and August 2005.  But while the reports may have been right on, creditors claim that Goldman knew that Bayou was turning around and reporting substantial gains to investors and did nothing about it. 

“Through either gross negligence or a willful choice to ignore the signs of fraud, G.S.E.C. failed to diligently investigate the red flags it was made aware of it, to contact Bayou’s auditors to request additional information, or to alert the appropriate authorities of what it had learned,” the suit alleges.

In 2004, Bayou provided Goldman with reports that claimed it had earned returns of almost 18 percent since its inception, which the suit says was “completely inconsistent with the actual returns the Bayou Funds had been realizing in their trading accounts at G.S.E.C., in which they had done nothing but lose money.”

Goldman has declined to comment.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com

Tags: april-29, brokerages, cash-balances, due-diligence-service, island-bankruptcy, last-november, month-of-january, raanan-agus, trading-futures, us-marshals-service