AlphaMetrix Clients Could Be Out $13 Million

Dec 4 2013 | 12:34pm ET

Hedge funds could be on the hook for $13 million owed them or their clients by AlphaMetrix Group.

The Commodity Futures Trading Commission monitor overseeing the hedge-fund services firm said that hedge funds and commodity trading advisers are owed between $7 million and $10 million in fees by AlphaMetrix. In addition, their investor clients are owed $3 million in rebates.

Last month, the CFTC accused AlphaMetrix of misappropriating $2.8 million in fee rebates. The allegation came after AlphaMetrix warned clients in October that it had "encountered significant cash-flow issues," followed by a decision to begin closing investment pools.

Still, the monitor, Deborah Thorne, said she believes 95% of investor funds should be returned by Dec. 20, although that does not include the rebates. She warned that AlphaMetrix has "spent most or all" of that $13 million.

Thorne added "that additional investigation into the activities of current and former management should be conducted to determine whether there are causes of action to be pursued to bring in additional funds to compensate the losses of the rebate claims and possibly the claims of the CTAs."


In Depth

U.S. Treasury Moves on Reinsurance Loophole

Apr 24 2015 | 5:11pm ET

The U.S. Treasury Department has released proposed rules aimed at limiting the ability...

Lifestyle

Artivest Announces Funding Round Led by KKR & Co.

May 4 2015 | 9:56am ET

Artivest, a startup that provides individual investors with access to private equity...

Guest Contributor

Starting a ‘40 Act Fund Family? Don’t Forget Your Board

Apr 30 2015 | 7:18am ET

The convergence of the hedge fund and mutual fund worlds continues unabated, as...

 

Editor's Note