Sentinel Management Group, the Chicago-based money manager that the Securities and Exchange Commission has accused of misappropriating client assets and defrauding clients, is reportedly missing $505 million in its accounts. The National Futures Association found the shortfall during a recent investigation.
The missing funds could bring up questions regarding a settlement that Sentinel made to creditors and Citadel Investment Group.
According to the SEC, the money manager allegedly mixed up funds from clients with its own funds. The Financial Times says that creditors from one account were given their money back after Citadel bought a number of assets. The SEC was opposed to the transfer, however, saying that the refunded assets likely belonged to creditors from a different account.
The FTA, however, says that there is currently no hard evidence to support the SEC’s conclusion that the assets that were refunded came from another account. The investigation will continue and the assets could still be found.
NFA president Daniel Roth says that customers of future traders have not lost any money due to Sentinel. He cited the $321 million that the Bank of New York lent to Sentinel as the main source of the missing funds.
The NFA is the in-house agency of the futures industry that examines trading practices. The Commodity Futures Trading Commission, the futures market overseer of the U.S. government, is also conducting its own probe of Sentinel.
Roth says that investigators are focusing on commingled accounts, rather than accounts that were kept separate.
If you are an investor that has lost money because of the wrongful or illegal actions of any individual or company within the securities industry, do not hesitate to call Shepherd Smith and Edwards and ask to speak with one of our securities fraud attorneys. We can represent you and protect your interests and we will do everything to recover your lost funds for you.
Related Web Resources:
Sentinel missing $505M, says NFA, Investment News, September 5, 2007
Investigator: Sentinel missing $500 mil., Chicago-Sun Times, September 1, 2007
Citadel removed from Penson suit, Chicagotribune.com, September 5, 2007