Hedge Fund Lake Shore Barred From Futures Trading

May 21 2009 | 9:27am ET

Accused of defrauding investors of $11 million, Chicago hedge fund Lake Shore Asset Management has been effectively barred from trading on U.S. futures exchanges for failing to cooperate with investigators.

The National Futures Association permanently expelled Lake Shore from membership, which will keep it from trading on domestic futures exchanges, last week. The NFA took the move after an unnamed principal of Lake Shore stopped cooperating with its probe of alleged fraud at the firm.

Lake Shore, formerly chaired by ex-Chicago Mercantile Exchange Chairman Laurence Rosenberg, was charged with defrauding investors two years ago, freezing the hedge fund’s assets. According to the Commodity Futures Trading Commission, Lake Shore claimed it had $1 billion in assets, but actually had less than half that. The regulator also says the hedge fund hid losses of about $37.5 million between 2002 and 2007, and misappropriated $11 million.

The CFTC has also charged Lake Shore President Philip Baker with fraud.


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Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

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