DePauw University is suing the New York-based firm Hennessee Group for $3.25 million for allegedly providing ill advice that DePauw should invest in Bayou Management, which has recently pled guilty to fraud charges in the Federal Court in White Plains, BusinessWeek Online reports.

The DePauw lawsuit names Lee Hennessee and her husband, Charles Gradante, as defendants. The school is demanding retribution because Hennessee used "untrue statements of material fact," and "falsified" investment-performance results. The school says Hennessee gave it Bayou's track record dating back to 1997, although Bayou did not come to existence until 2003. Hennessee is also accused of forging interviews and background information about Bayou founder, Sam Israel. Before forming Bayou, Hennessee says, Israel was the head trader of Omega Advisers, and made partner in 1994. But that turned out to be false.

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