The Commodity Futures Trading Commission has filed an enforcement action in the U.S. District Court for the Southern District of New York, alleging that Linuxor Asset Management and Abbas Shah, the firm's principal, defrauded hedge fund participants in the Linuxor Global Macro Fund. Shah both managed the fund and was its trading adviser.

More specifically, the complaint shows that Shah sent at least two misleading e-mails to fund participants misrepresenting the net asset value of the fund and his success in recovering prior losses. The complaint also alleges that Shah and Linuxor failed to send clients quarterly reports and a timely annual report.

The CFTC is seeking a permanent injunction against Shah and Linuxor, restitution to defrauded participants, civil monetary penalties and a permanent prohibition from trading commodity futures.

W. Derek Shakabpa, David Acevedo, Lenel Hickson, Jr., Stephen J. Obie and Richard Wagner are all members of the Securities and Exchange Commission's division of enforcement and are responsible for this case.

(c) 2005 Money Management Executive and SourceMedia, Inc. All Rights Reserved.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.