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October 24, 2008 at 11:56 AM
The U.S. Department of Labor has sued an investment advisor in connection with allegations that the firm invested retirement plan assets in a hedge fund while getting undisclosed compensation from the hedge fund.
The department has filed a suit in the U.S. District Court for the Northern District of California against Zenith Capital L.L.C., Santa Rosa, Calif.
The department alleges that Zenith and its executives “invested the assets of 13 retirement plan clients in the hedge fund Global Money Management L.P., while receiving undisclosed incentive fees from the hedge fund’s sponsor and manager,” department officials say.
The U.S. Securities and Exchange Commission took control of Global Money Management, San Diego, in March 2004.
The hedge fund told investors it had more than $60 million in assets, but the SEC found only $27,000 in fund accounts, according to a complaint filed by the SEC in 2004.
