Feb. 28, 2003 -- Lord Abbett money manager Stephen McGruder will retire at the end of September, stepping down as WASHINGTON (HedgeWorld.com)--Liquidation claim forms will be sent to 2,278 clients with accounts tied up in the collapse of Park South Securities, a firm that collapsed as a result of a hedge fund fraud case, according to the Securities Investor Protection Corporation.
The SIPC is a group sanctioned by Congress to help investors at bankrupt brokerage firms. Officials there say that as of Feb. 5 the frozen Park South accounts totaled US$77 million. Court appointed trustee Irving Picard of the law firm Gibbons, Del Deo, Dolan, Griffinger and Vecchione, said that the process of unfreezing and transferring customer accounts to other firms. Claim forms will be made available at the SIPC's website (www.sipc.org) on or about March 7.
On Feb. 5, Stone House Capital Partners LP, a purported hedge fund, became the center of the Park South fraud case that involves the misappropriation of funds in certain brokerage accounts. The Securities and Exchange Commission is alleging that Todd M. Eberhard of Eberhard Securities diverted US$9.7 million out of brokerage accounts to Stone House, which Mr. Eberhard claimed was an unaffiliated San Francisco-based hedge fund that held US$1.6 billion in existing customer funds.
In truth, Stone House operated out of Park South's offices in Melville, N.Y., and had US$1.75 million in two accounts with Banc of America Securities, according to the SEC. One of the BofA accounts was a contribution account, while the other was a prime brokerage account with assets being first deposited in December 2002.