Hedge Fund Investors – Litigation Against Hedge Funds’ Auditors and Administrator

Representing investors, who invested approximately $100 million into a now-defunct hedge fund that had perpetrated, according to the SEC, a billion-dollar Ponzi-like scheme. The fund managers were convicted in a criminal action. The joint official Cayman Island liquidators recovered minimum assets from the liquidation and claims against the fund managers, which in total amounted to less than what the fund owed to its secured creditors. Herrick commenced an action against the funds’ auditors, the third-party administrator and others, asserting claims for breach of contract, breach of fiduciary duty and negligence. Herrick finalized multiple confidential settlements on terms favorable for our clients, and prevailed at trial on bitterly contested arbitration claims against non-settling parties which may result in recoveries for the investors exceeding 50% of their losses.