WEST PALM BEACH, FL (www.hedgeco.net) – A Cayman Islands judge has appointed the firm, Kroll [Cayman] to help in liquidating the assets of four of the Bayou hedge fund subsidiaries operating in the country. The four funds, Bayou Offshore Master Fund, Bayou Offshore Fund A, Bayou Offshore Fund B, and Bayou Offshore Fund C. were operated by the collapsed Bayou Hedge fund group Ltd.  In a statement, Gordon MacRae of Kroll said, “With the court’s appointment, we are now in a position to investigate this matter — and we will do so as proficiently as possible.”

U.S. government regulators have charged Bayou Hedge Fund operators and its founder Samuel Israel III, with fraud. Authorities charged that the fund has falsified records, and has cheated its investors with millions of dollars. Investigators closed in on the firm following tip-offs from some investors in the fund, when the fund operators failed to return investors assets when it stated it would be closing its doors.
While Bayou managers claimed the fund has over $440 million in investor assets, investigators recently said the fund may have attracted more than $300 million. The liquidating firm, Kroll Ltd has set up the website (www.bayoucaymanliquidation.ky) to assist investors in the fund in getting up-to-date information and other developments regarding the fund.

The problems of the Bayou hedge fund took everyone by surprise; hedge funds have largely increased their transparency to its investors. David Roeder, a Sun-Times Columnist noted, “Bayou had all the hallmarks of a well-positioned hedge fund — a founder with a Wall Street pedigree and at least some experience at a well-known hedge fund firm, Omega Advisors. Its straight-ahead, short-term trading strategy appealed to investors. Yet a number of missed red flags, in hindsight, might have saved them — and their money. Wary investors could have noted Bayou’s obscure auditing firm.”

Paul Oranika
Contributing Writer
HedgeCo.Net
Email: Editor@hedgeco.net

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