The $1.9 billion Houston Municipal Employees Pension System has filed a lawsuit against hedge fund operator, Highland Capital Management, The Wall Street Journal reports. The suit has been filed over the pension fund’s $15 million in investments in the shuttered Crusader Fund, which was set up to invest in distressed corporate debt.
The suit accuses Highland and the Crusader Fund of not being able to protect investors, while it collapsed, freezing investor withdrawals while protecting its own hedge fund network. The suit also names JP Morgan Chase in its capacity as an administrator for the fund. The fund has also been accused of artificially manipulating the net asset value of Highland hedge funds by cross-trading assets at deceptive prices.