WEST PALM BEACH, FL (HEDGECO.NET) – The Securities and Futures Commission of Hong Kong, (SFC) has issued an interim injunction against a Hong Kong based hedge fund manager and its executive, CharlesSchmitt, to stop the firm from conducting activities in its hedge funds. Such prohibition is aimed at preventing the fund managers from diminishing in any way the value of its assets.
The Hong Kong agency, charged with the affairs of regulating hedge funds and other members of the Hong Kong financial markets has instituted an investigation into the alleged misappropriated investor assets in its hedge fund with about US $175 million in investor assets.
The injunction order was issued by the High Court, against Charles Schmitt & Associates Ltd (CSAL), in pursuance to the Hong Kong Securities and Exchange ordinance section 213. The injunction was issued to protect investors� assets in the fund while the SEC further investigates the allegations.
According to news reports, other financial institutions such as banks, holding assets of the CSAL have also been officially notified of the pending action against the asset manager. Earlier, the SEC issued a restriction order barring CSAL from conducting any activities under regulation from the agency.
The action by the SFC was necessitated by suspicion according to an SFC spokesman, who said some client assets might have been misappropriated in the CSAL Absolute Return strategy; the spokesman did not provide details of such allegations.
According to the SFC, the senior management of the Charles Schmitt & Associates hedge fund is cooperating with the investigations. Officials of the hedge fund company could not be immediately reached for comments.
The SEC is the regulatory agency of Hong Kong, according to information posted on the firm�s website. The function of the SFC is to administer the laws relating to the trading of securities, futures, and leveraged foreign exchange contracts in Hong Kong.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
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