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Man Financial Slapped With RICO Charge
Is the latest suit against Man Financial a publicity stunt? The U.S. unit of the U.K. giant thinks so.
Is the latest suit against Man Financial a publicity stunt? The U.S. unit of the U.K. giant thinks so. On Monday, attorney Clark Hodgeson, the court-appointed receiver for failed hedge fund Philadelphia Alternative Asset Management, filed the action against Man and seven of its employees charging them with fraud, negligence and violations of the U.S. Racketeer Influenced and Corrupt Organizations Act. Man Financials participation in artificially inflating the reported returns of the offshore fund caused investors... to continue to invest and/or remain invested in the respective funds, according to the lawsuit, filed in federal court in Philly. Those are heavy allegations, especially since the center of attraction in the matter former PAAM President Paul Eustace, who filed for bankruptcy last year is out of the picture. In April, Eustace settled with the Commodities Future Trading Commission (in which he agreed to a lifetime ban from the industry and to make restitution). Calling the latest allegations against it outrageous and spurious, Man Financial said in a statement, In bringing a claim under RICO, the receiver is courting publicity. Not only that, but also treble damages, which legal experts say is a strategy to encourage a quick settlement. Man, which said it will vigorously defend itself against the charges, said it was scurrilous that the receiver sued the seven employees, many of whom, says Man, were only peripherally involved.