Hedge Fund Grifphon, Under Probe, Settles Investor Lawsuit

Dec 16 2010 | 1:11am ET

An Oregon hedge fund facing a state fraud investigation has dealt with another legal headache.

Grifphon Asset Management founder Yusaf Jawed has settled a lawsuit filed by a pair of aggrieved investors who accused the hedge fund of failing to fill a redemption request. The deal comes just days before the lawsuit, which sought about $300,000, was to go to trial.

It is unclear how much Jawed settled for, but his lawyer told the Portland Business Journal that the investors, Edward and Linda Gilbert, "got their redemption amount." Neither Jawed nor Grifphon admitted any wrongdoing.

The Oregon Division of Finance and Corporate Securities is probing Grifphon and another Portland-area hedge fund, Sasquatch, which was founded by a former Jawed business partner. The investigation was sparked by complaints from several investors alleging they have been unable to withdraw their money.

Jawed has acknowledged that Grifphon has suffered from liquidity problems after the hedge fund failed to get a needed bridge loan. Robert Custis, the Grifphon lawyer, also told the PBJ that the firm has agreed to sell all of the holdings of all four of its funds, with plans to restructure to ensure better liquidity in the future.

"What Grifphon learned is that liquidity is of high importance to most people," Custis added.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...