Release: 5243-06

For Release: October 10, 2006

U.S. Commodity Futures Trading Commission Seeks to Revoke the Registration of Hedge Fund Operator Bayou Management LLC

Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today that on September 27, 2006 it filed a Notice of Intent to Revoke Registration (Notice) against Bayou Management LLC.

The Notice alleges that, under the Commodity Exchange Act, Bayou Management is subject to a statutory disqualification of its registration based on a federal court’s entry of a permanent injunction against it. The Notice specifically alleges that on April 3, 2006, the U.S. District Court for the Southern District of New York entered a partial consent order of permanent injunction against Bayou Management in an action brought by the CFTC in September 2005 (see CFTC Press Release 5121-05, September 29, 2005).

The CFTC’s complaint in that action alleged that Bayou Management and others committed fraud by: 1) misappropriating customer funds; 2) acquiring funds through false pretenses; 3) engaging in unauthorized trading; and 4) misrepresenting material facts to actual and prospective investors, including the rates of return the hedge fund earned, the value of assets under management, and the existence and identity of the accounting firms that had purportedly audited the commodity pools managed by Bayou Management.

The following CFTC Division of Enforcement staff are responsible for this case: Christine Ryall, Eugene Smith, Patricia Gomersall, Paul Hayeck, and Joan Manley.

Media Contacts
Alan Sobba

Dennis Holden

Last Updated: April 22, 2010