Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, May 3, 2007

SEC Obtains Asset Freeze of Hedge Fund Advisor

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.

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