SEC Charges Two Former Sentinel Execs With Fraud

Jun 23 2008 | 2:00am ET

The Securities and Exchange Commission has charged two former Sentinel Management Group executives, Eric Bloom and Charles Mosley, for allegedly defrauding clients, including hedge funds, to the tune of several hundred million dollars. 

Prior to filing for bankruptcy in August, Sentinel managed short-term cash investment portfolios for various advisory firms, including hedge funds. In an amended complaint filed this week in federal court in Chicago, the SEC added Bloom and Mosley as defendants in the action it instituted against Sentinel last summer.

Bloom served as CEO of Sentinel for almost 20 years, and Mosley was head trader and portfolio manager at the firm.

The SEC alleges that for about four years, Bloom and Mosley exposed their clients to substantial risks by engaging in an undisclosed investment strategy that relied extensively on leverage and repurchase transactions. Additionally, the pair allegedly misused client portfolio assets to finance risky leveraged trading for the benefit of Sentinel's house portfolio, which was owned by Sentinel insiders, including Bloom and Mosley.

The SEC is seeking a permanent injunction against the defendants as well as disgorgement, prejudgment interest, and civil penalties.


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

Puerto Rico Woos The Rich But So Far Gains Little

Apr 17 2015 | 2:45am ET

Hedge fund manager Rob Rill grins. He has just had word that U.S. financial regulators...

Guest Contributor

Opportunities Ahead: Asian Fixed Income and Currency Markets

Apr 24 2015 | 6:18am ET

For hedge funds focusing on Asia, the policy uncertainty, unclear interest rate...

 

Editor's Note