Thursday, May 3, 2007
The Commission announced that today the U.S. District Court in Boston will issue a preliminary injunction order that, among other things, continues a freeze on the assets of a Boston-based hedge fund adviser and its principals. On April 12, 2007, the Commission filed an emergency action in the federal district court in Massachusetts against Lydia Capital, LLC, a registered investment adviser based in Boston, Massachusetts, and its two principals, Glenn Manterfield, of Sheffield, England and Evan Andersen, of Boston, Massachusetts. The Commission's Amended Complaint alleges that, between June 2006 and April 2007, Manterfield and Andersen, acting through Lydia, engaged in a scheme to defraud more than 60 investors, who invested approximately $34 million in Lydia Capital Alternative Investment Fund LP (Fund), an unregistered hedge fund managed by Lydia. The Amended Complaint alleges that defendants told investors that they intended to use the Fund's assets to acquire a portfolio of life insurance polices in the life settlement market. According to the Amended Complaint, while the Fund did acquire interests in some insurance polices, defendants materially misled investors about their operations and misappropriated at least $2 million of investor funds. On April 12, 2007, in response to the Commission's request for emergency relief, the Court issued a temporary restraining order that, among other things, froze defendants' assets. On May 3, 2007, following a hearing before the Court on May 2, 2007, the Court issued a consented-to preliminary injunction and ordered a continuation of an asset freeze of the defendants' assets.