Clients of Lake Shore Asset Management, the Chicago hedge fund accused of lying to investors, will get about 40% of their money back under a plan approved by a federal judge this week.
Investors, who have claimed losses of $268 million, will get $103.9 million back under an order signed by U.S. District Judge Blanche Manning on Monday. Robb Evans & Associates, the receiver for the hedge fund, has recouped about $110 million, $3 million of which has been set aside to cover Robb Evans’ costs and those of any potential appeals.
Regulators pulled the plug on Lake Shore in 2007, accusing it of improperly charging incentive fees and hiding almost $40 million in losses from investors. According to the Commodity Futures Trading Commission, the hedge fund sent phony account statements claiming substantial profits.
Lake Shore founder Philip Baker has been charged with wire fraud, obstruction of justice, commodities fraud, embezzlement of commodity pool funds and criminal contempt for running a $312 million fraud. His trial is set to begin in August; Baker faces up to 25 years in prison if convicted.
Manning said that Lake Shore has been “completely uncooperative” in the investigation.
Robb Evans said it hasn’t given up looking for money, leaving open the possibility that more could be found. Ira Bodenstein, a lawyer for the receiver, said no schedule for payments has been made.