Hedge Fund Reader : UK-based Man Group accused of having a hand in the collapse of Philadelphia Management

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October 01, 2005

UK-based Man Group accused of having a hand in the collapse of Philadelphia Management

There are stains marked on Man Group’s, subsidiary Man Financial, London’s top Hedge Fund. Man which is managed by the CEO, Mr. Stanley Fink, a well-known personality has agreed to co-operate in any investigation. Man Financial has been accused by the Pennsylvania court for wrong dealing and a party to the collapse of Philadelphia Alternative Asset Management Company in June this year. The fund was managed by Mr. Paul Eustace, a well known icon in the hedge funds industry and had raised about $300m from international investors last year. Man Financial is accused by the receiver to the collapsed fund, Mr. Clark Hodgson of helping Mr. Eustace bloat his true investment performance through a secret account through UBS in Cayman Islands to hide losses. Mr. Thomas Gilmartin, a senior vice-president at Man Financial in New York, however named in the documents as Mr. Eustace's chief point of contact. It is to be seen the alleged role of Man Financial in the transaction, if they are charged it could give a strong blow to the reputation of Man Group. Guardian Unlimited Reports:

Documents filed in a Pennsylvania court this week accuse Man, the company that sponsors the Booker literary prize, of allowing losses of $175m (£100m) to be hidden from investors in a third-party hedge fund. The mechanism is claimed to be a secret and unauthorised account in the Cayman Islands known as the "50 account".