MSNBC- Sentinel Management Group, a US money manager at the centre of recent market turmoil, was Monday charged with fraud and misuse of client assets by the Securities and Exchange Commission.
The problems at Sentinel have been the cause of particular concern for the US and global markets recently as they were thought to be investing in relatively safe assets on behalf of hedge funds and futures brokers.
Last week, however, the firm informed investors it was freezing certain assets, which it then tried to sell, without first informing all investors, to Citadel Investments, the Chicago based hedge fund. Late last week, the firm applied for bankruptcy.
But Monday, the SEC alleged in a complaint lodged with a district court in Chicago that Sentinel had indulged in “ongoing fraud and misappropriation and misuse of client assets”.
The complaint says Sentinel, which claims to have $1.2bn in assets under management, defrauded its clients by improperly co-mingling, misappropriating and leveraging their securities in violation of the investment advisors act of 1940.
