Disparity Between Valuations of Hedge Funds of Unlisted Securities Not Misleading by Itself; Self-Dealing Needed for Fraud

Business Valuation UpdateVol. 11 No. 11
Legal and Court Case Update
November 2005

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6282 Investment Advice
523920 Portfolio Management
securities litigation
net asset value, securities fraud
Fraternity Fund Ltd. v. Beacon Hill Asset Management LLC
2005 U.S. Dist. LEXIS 13094
July 5, 2005
US
Federal Court
New York
United States District Court
Charles R. Jacob III, Edward Flis, Emilio A. Galvan, Joel M. Miller, John D. Tortorella, Jonathan Frank, Kevin H. Marino, Lawrence S. Lustberg, Michael Critchley, Michael Critchley Jr., Robert G. Stahl, Scott M. Berman, Seth M. Schwartz, Teresa A. Gon
Kaplan

Summary

Beacon Hill Asset Management LLC (Beacon Hill), an investment manager of hedge funds that invested in mortgage-backed and related securities, allegedly overstated the net asset values (NAV) of three funds from March 2000 through September 2002 by as much as 61.22%.

See Also

Fraternity Fund Ltd. v. Beacon Hill Asset Management LLC

Full Text of Court Cases
July 5, 2005

One of the issues was whether Beacon Hill's valuations were fraudulent because they deviated from valuations done by independent appraisers/brokers.