Portland Hedge Fund Fraud Probe Expands

Jan 20 2012 | 12:38pm ET

A federal investigation into a pair of Portland, Ore., hedge funds continued to grow last week with a new round of investor interviews and a new subpoena.

The Securities and Exchange Commission spoke with Sasquatch Capital clients, as it had done with clients of Grifphon Asset Management last year. The agency also issued a subpoena to lawyer Robert Banks, who represents some Grifphon clients, seeking internal documents from the hedge fund.

Grifphon and Sasquatch are under investigation by both the SEC and Oregon authorities for possible fraud. Investors had accused Grifphon chief Yusaf Jawed and Sasquatch's Lyman Bruhn of running a Ponzi scheme, and have filed lawsuits to that end.

Jawed has repeatedly said that he is nearing a solution to his hedge fund's liquidity problems. On Wednesday, he sent investors a letter assuring them that "we continue to work assiduously to bring about liquidity, and expect to accomplish this task in the relatively near future." But he also said that his former lawyer would no longer take inquiries from clients.

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