Bankruptcy (Sentinel Management Group) Sleuths Find Cash in Trader Receipts for Lap Dancers

[Bozita]

Source: Bloomberg

Bankruptcy Sleuths Find Cash in Trader Receipts for Lap Dancers

By Seth Lubove


May 5 (Bloomberg) -- As Sentinel Management Group Inc. neared collapse in August 2007, piling up $950 million in losses, the Northbrook, Illinois-based investment firm wrote clients, saying it was yet another victim of the credit crunch -- an asset manager that grew too fast as it tried to ratchet up gains for customers.

The Securities and Exchange Commission didn’t buy the explanation of the 28-year-old company, which had about $1.4 billion under management, most of it for futures or commodities traders and hedge funds.

After a week-long examination, the SEC filed a civil suit against Sentinel in U.S. District Court in Chicago, accusing the company of, among other things, using client money to secure a $500 million credit line.

“The clients had no way of knowing that their assets had been used by Sentinel to obtain financing for its own purposes,” the SEC complaint says.

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