Former Man Group Futures Broker Settles Hedge Fund Lawsuit

Dec 4 2007 | 11:14am ET

The receiver for collapsed hedge fund manager Philadelphia Alternative Asset Management’s fund has struck a deal with futures broker MF Global.

Steven Harmelin said MF Global, which was spun off from British hedge fund giant Man Group earlier this year, has agreed to pay $69 million to PAAM’s investors, as well as $6 million in legal costs. The receiver had sought $175 million, accusing MF Global of helping founder Paul Eustache hide the fund’s losses.

Regulators shut down PAAM in June, alleging it lied to investors about big losses, defrauding them of $200 million. Last month, Eustache was indicted by federal prosecutors with two counts of commodities fraud.

MF Global did not admit any wrongdoing as part of the settlement.

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