For Release: July 17, 2007
Federal Court Extends CFTC Asset Freeze over Hedge Fund Lake Shore Asset Management Limited
More Than $238 Million of Funds that Lake Shore Has On Deposit Will Remain Frozen
Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on July 13, 2007, Judge Blanche M. Manning, of the United States District Court for the Northern District of Illinois, extended indefinitely the court-imposed asset freeze against Lake Shore Asset Management Limited (LAM) as part of a restraining order issued by the court against LAM on June 27, 2007 (see CFTC News Release 5349-07, June 28, 2007). The July 13 ruling stems from a hearing held on July 10, 2007.
As a result of the asset freeze order, more than $238 million of funds that LAM has on deposit will remain frozen until further order of the court. LAM is a registered commodity trading advisor (CTA) and commodity pool operator (CPO).
CFTC Files Contempt Motion Against LAM
Separately, on July 3, 2007, the CFTC filed a contempt of court motion against LAM for its continued failure to comply with the portions of the restraining order requiring it to produce records (see CFTC News Release 5351-07, July 5, 2007). The CFTC, in its contempt filing, alleges that LAM has neither allowed CFTC staff to inspect and copy its books and records, nor has it produced the requested documents to the CFTC, as mandated by the restraining order.
The court deferred ruling on the contempt motion at the July 10 hearing but granted the CFTC’s motion for expedited discovery and gave LAM until July 24, 2007, to file a written response to the CFTC’s contempt motion.
LAM contends that its failure to fully produce the customer account records and disclosure documents and hedge fund offering memoranda is grounded in unspecified Swiss bank secrecy laws and that the hedge fund did not intend to submit to the CFTC’s jurisdiction.
The following CFTC Division of Enforcement staff are responsible for this case: Diane M. Romaniuk, Ava M. Gould, Mary E. Spear, Don Nash, Scott R. Williamson, Rosemary Hollinger, and Richard B. Wagner. The CFTC also appreciates the assistance it has received from the National Futures Association (NFA).
Last Updated: July 20, 2007