WEST PALM BEACH, FL (www.hedgeco.net) – The Principals of the Chicago-based money-management firm Northshore Asset Management were named in an SEC emergency enforcement action for misappropriatingabout $37 million from two hedge fund portfolios, which they acquired in 2004. According to the report, the SEC moved in the emergency action to freeze the assets of Northshore and the two hedgefunds, Ardent Domestic and Ardent Offshore.
The assets of CEO Kevin Kelley, Robert Wildeman, and Glenn Sherman were also ordered frozen pending investigations. The report also said the assets of Saldutti Capital Management, the previous owner of North Shore Asset Management were also ordered frozen.
In its complaint, the SEC alleged that Northshore, through the action of its principals, �diverted about $37 million of the funds’ assets to their control and invested them in illiquid securities of, and made loans to, entities in which Northshore and its principals have interests.�
The SEC also charged that the Principals of Northshore failed to notify the fund�s investors about what the agency characterized as “numerous misrepresentations” relating to the nature of such transactions and investments. The regulator also noted that the Principals failed to inform the fund�s investors about the liquidity as well as the use of investor funds for such investments.
Several redemption requests from investors were allegedly refused during the past several months. The SEC ordered a restraining order, which froze the assets of the defendants, while a temporary receiver was appointed to administer the assets pending the resolution of the case. The defendants denied any wrongdoing.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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