Angry Investors Sue Hedge Fund Accountants

Oct 6 2011 | 11:09am ET

Frustrated by promises of payments—but no actual checks—investors in two Oregon hedge funds have expanded the scope of their litigation.

Clients of Grifphon Asset Management and Sasquatch Capital, under investigation by Oregon authorities for possible fraud, have sued the funds' accountants, alleging that Fred Williams and Hoang Nguyen prepared accountant statements rife with overvaluations.

Investors, who have accused Grifphon chief Yusaf Jawed and Sasquatch chief Lyman Bruhn of running a Ponzi scheme, said Williams and Nguyen prepared the statements "recklessly or through gross incompetence." Both men worked at Perkins & Co. during the period covered by the lawsuit, although neither are still with the firm.

The trouble for Grifphon and Sasquatch started when several investors became concerned when they were unable to redeem their money. Jawed has admitted that Grifphon has suffered from liquidity problems, but the firm's lawyer has repeatedly said that a sale of the hedge funds was imminent.

"We've been hearing that for 47 weeks now," Bob Banks, a lawyer for some of the investors, told the Portland Business Journal in August. "Every week we get an e-mail saying that it's imminent."

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