New York (HedgeCo.net) – The Court of the Cayman Islands has found two hedge fund directors guilty neglecting their duties, fining them $111 million each.

The hedge fund, Weavering Macro Fixed Income Fund, was found to have failed because of the directors’, “Decision not to take any meaningful role in the business of the fund, and their decision to simply sign documents which were put before them, without applying their minds to their content.” The court said.

Like many Cayman Islands investment funds, the directors had indemnity, covering all losses, with the exception of failure caused by the directors’ own wilful neglect or default. The Court found that the directors’ conduct fell well below that which was required of them.

“The case shows that directors of Cayman Islands investment funds cannot sit idly by, leaving the management and control of the fund to its service providers. A director’s duty to supervise the affairs of the company, and to exercise reasonable care, skill and diligence are non-delegable” said Shaun Folpp, Managing Associate at Ogier Cayman who, together with Will Jones, Associate, acted for the successful Plaintiff, led by David Lord QC.

(Note) One of the directors fined was the younger brother of the investment manager and the other their elderly stepfather.

Alex Akesson
Editor for HedgeCo.net
alex@hedgeco.net
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