Lake Shore Victims To Get $104 Million

Mar 18 2010 | 8:45am ET

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.


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Future of Private Equity: New Opportunities, New Challenges

Feb 3 2017 | 6:41pm ET

The private equity industry’s astonishing rebound since the financial crisis has...

 

From the current issue of