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April 16, 2003 at 08:00 PM
NEW YORK (HedgeWorld.com)–Selected investors in Beacon Hill Asset Management hedge funds sued the Summit, N.J., firm, as well as Beacon Hill’s 50% owner, Asset Alliance, and a fund administrator, ATC Trustees Corp. (Cayman Ltd.), according to an attorney’s statement.
The suit was filed in Federal District Court by the law firm Brown Rudnick Berlack Israels LLP on behalf of 34 investors with US$79 million invested with Beacon Hill funds, according to Scott Berman, an attorney for Brown Rudnick Berlack Israels. The suit centers on various forms of alleged fraud, and also on alleged breach of fiduciary duty, Mr. Berman said.
Beacon Hill, a mortgage-backed hedge fund manager, had restated its September investment returns twice in October, with a single-month loss for one of its funds eclipsing 50%. The funds eventually were liquidated, and the Securities and Exchange Commission filed its own suit in November .
Asset Alliance was included in the suit because of its role as part owner of the firm. By virtue of their control position, Asset Alliance was a control person partly responsible for the alleged frauds and misrepresentations, Mr. Berman said.
