Ernst & Young Sued Over Perot Hedge Fund Collapse

Aug 27 2010 | 10:50am ET

Investors in a hedge fund managed by former presidential candidate H. Ross Perot’s family office have sued its accountants, accusing them of helping Parkcentral Capital Management defraud them.

The lawsuit alleges that Ernst & Young “facilitated, assisted in and participated in” the fund’s fraud. A lawyer for the investors said that Parkcentral’s “audited financial statements never once warned Parkcentral’s investors of their impending doom.”

Parkcentral itself was sued last year over the 2008 collapse of its $2.6 billion Global Hub hedge fund, which plaintiffs allege was controlled by the Perot Family Trust and other Perot-controlled entities. According to one lawsuit, Parkcentral misled investors about the fund’s liquidity, leverage and risk controls, leading to the complete wipe-out of the hedge fund’s value.

JPMorgan Chase has also sued Plano, Texas-based Parkcentral for defaulting on a $125 million margin call.

The plaintiffs in the latest lawsuit lost some $17 million in two Parkcentral hedge funds that collapsed.


In Depth

Q&A: Reg A+ Will Transform the Alternative Asset Landscape

Jul 7 2015 | 4:03pm ET

In addition to easing capital formation for small companies, Regulation A+ has enormous...

Lifestyle

Fiat Chrysler Files Paperwork For Ferrari IPO

Jul 23 2015 | 5:05pm ET

Italian sportscar maker Ferrari has taken a step closer to a stock market listing...

Guest Contributor

Lifting of Foreign Ownership Limits Signals Sea Change in Vietnam's Capital Markets

Jul 28 2015 | 3:01pm ET

The lifting of restrictions on foreign ownership limits in Vietnam later this year...

 

Editor's Note