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Sentinel Management Files for Chapter 11 Bankruptcy
- Thread starter ASusilovic
- Start date
Statement from Velocity:
Due to the liquidity issues that have been discussed in the press recently, Velocity feels that it is important to reassure our customers and potential customers of Velocityâs continued health and financial stability. The situation regarding Sentinel Management Group (âSentinelâ) affects up to 20 Futures Commission Merchants (âFCMsâ), of which Velocity is one. Sentinel is a registered FCM, approved by the CFTC to manage the customer funds of other FCMs. This approval can be found at the following link on the CFTC's website: www.cftc.gov/tm/letters/04letters/tm04-06.htm. It specifies the unique nature and safety afforded to FCM clients who placed funds with Sentinel.
Citing a liquidity crisis, Sentinel halted redemptions last Monday, August 13th. Velocity then revoked its investment advisory agreement with Sentinel and instructed Sentinel not to liquidate or trade any securities in Velocity's accounts with Sentinel. Sentinel nonetheless attempted to sell the assets of its clients (including Velocity) to Citadel, a hedge fund, at less than market value. Velocity attempted to block this purported sale by getting a Temporary Restraining Order from Judge Guzman in the Federal District Court in Chicago to protect its interests and the interests of its customers.
Velocity has approximately $15 million of customer segregated funds under management at Sentinel. Approximately $1 million was received from Sentinel on Friday, August 17, and another wire is expected on Monday, August 20. Any loss in customer segregated funds resulting from the Sentinel transaction will be borne by Velocity, not its customers.
We are experiencing record volumes, and most of our funds are with other FCMs for trading or on deposit with banks. In particular, Velocity has approximately $18 million of customer segregated funds with Fortis Clearing US, Fortis Bank London, FIMAT, and Bank of America.
If any Velocity customers wish to withdraw funds, Velocity is offering free wire transfers to all its customers this week to show our confidence and good faith. We hope our customers will continue to do business with Velocity. We thank all of our customers for their continued support.
VELOCITY MANAGEMENT
Due to the liquidity issues that have been discussed in the press recently, Velocity feels that it is important to reassure our customers and potential customers of Velocityâs continued health and financial stability. The situation regarding Sentinel Management Group (âSentinelâ) affects up to 20 Futures Commission Merchants (âFCMsâ), of which Velocity is one. Sentinel is a registered FCM, approved by the CFTC to manage the customer funds of other FCMs. This approval can be found at the following link on the CFTC's website: www.cftc.gov/tm/letters/04letters/tm04-06.htm. It specifies the unique nature and safety afforded to FCM clients who placed funds with Sentinel.
Citing a liquidity crisis, Sentinel halted redemptions last Monday, August 13th. Velocity then revoked its investment advisory agreement with Sentinel and instructed Sentinel not to liquidate or trade any securities in Velocity's accounts with Sentinel. Sentinel nonetheless attempted to sell the assets of its clients (including Velocity) to Citadel, a hedge fund, at less than market value. Velocity attempted to block this purported sale by getting a Temporary Restraining Order from Judge Guzman in the Federal District Court in Chicago to protect its interests and the interests of its customers.
Velocity has approximately $15 million of customer segregated funds under management at Sentinel. Approximately $1 million was received from Sentinel on Friday, August 17, and another wire is expected on Monday, August 20. Any loss in customer segregated funds resulting from the Sentinel transaction will be borne by Velocity, not its customers.
We are experiencing record volumes, and most of our funds are with other FCMs for trading or on deposit with banks. In particular, Velocity has approximately $18 million of customer segregated funds with Fortis Clearing US, Fortis Bank London, FIMAT, and Bank of America.
If any Velocity customers wish to withdraw funds, Velocity is offering free wire transfers to all its customers this week to show our confidence and good faith. We hope our customers will continue to do business with Velocity. We thank all of our customers for their continued support.
VELOCITY MANAGEMENT
Source : http://www.chicagobusiness.com/cgi-bin/news.pl?id=26066&seenIt=1#list
See a list of Sentinel's creditors :
Sentinel said in its filing that it signed a letter on Aug. 15 engaging the law firm of Goldberg Kohn Bell Black Rosenbloom and Moritz Ltd. to help with the bankruptcy petition.
In the filing, Sentinel lists its creditors holding the top 20 unsecured claims. They are:
* Discus Master Ltd.
* Trading LSIII
* IFX Markets Inc. House Account
* SMW Trading Company, Inc. Hse
* Jump Trading, LLC
* JEM Commodity Relative Value Fund LP Trading
* Rotchford L. Barker Rev. Living Trust
* BC Capital Fund A, LLC
* LakeShore Alt Financial Asset-Trading 2
* 2100 Capital Multi-Strategy Master GlobeOp Financial Services
* BC Capital Fund B, LLC
* Sentinel US Liquidity Fund, Ltd.
* Dighton UTG Fund SPC obo Aggressive Portfolio
* Sentinel Bank & Trust Ltd.
* Leviathan Diversified Fund 3XL
* Lake Shore AltFinancial Fund IV Ltd.-Trading
* Fortis Clearing Americas LLC US CFTC Reg 30.7
* One York Property, LLC
* Blueprint Partners LP
* Stone Capital Group, Inc.
See a list of Sentinel's creditors :
Sentinel said in its filing that it signed a letter on Aug. 15 engaging the law firm of Goldberg Kohn Bell Black Rosenbloom and Moritz Ltd. to help with the bankruptcy petition.
In the filing, Sentinel lists its creditors holding the top 20 unsecured claims. They are:
* Discus Master Ltd.
* Trading LSIII
* IFX Markets Inc. House Account
* SMW Trading Company, Inc. Hse
* Jump Trading, LLC
* JEM Commodity Relative Value Fund LP Trading
* Rotchford L. Barker Rev. Living Trust
* BC Capital Fund A, LLC
* LakeShore Alt Financial Asset-Trading 2
* 2100 Capital Multi-Strategy Master GlobeOp Financial Services
* BC Capital Fund B, LLC
* Sentinel US Liquidity Fund, Ltd.
* Dighton UTG Fund SPC obo Aggressive Portfolio
* Sentinel Bank & Trust Ltd.
* Leviathan Diversified Fund 3XL
* Lake Shore AltFinancial Fund IV Ltd.-Trading
* Fortis Clearing Americas LLC US CFTC Reg 30.7
* One York Property, LLC
* Blueprint Partners LP
* Stone Capital Group, Inc.
Quote from jearnest:
Statement from Velocity:
Due to the liquidity issues that have been discussed in the press recently, Velocity feels that it is important to reassure our customers and potential customers of Velocityâs continued health and financial stability. The situation regarding Sentinel Management Group (âSentinelâ) affects up to 20 Futures Commission Merchants (âFCMsâ), of which Velocity is one. Sentinel is a registered FCM, approved by the CFTC to manage the customer funds of other FCMs. This approval can be found at the following link on the CFTC's website: www.cftc.gov/tm/letters/04letters/tm04-06.htm. It specifies the unique nature and safety afforded to FCM clients who placed funds with Sentinel.
Citing a liquidity crisis, Sentinel halted redemptions last Monday, August 13th. Velocity then revoked its investment advisory agreement with Sentinel and instructed Sentinel not to liquidate or trade any securities in Velocity's accounts with Sentinel. Sentinel nonetheless attempted to sell the assets of its clients (including Velocity) to Citadel, a hedge fund, at less than market value. Velocity attempted to block this purported sale by getting a Temporary Restraining Order from Judge Guzman in the Federal District Court in Chicago to protect its interests and the interests of its customers.
Velocity has approximately $15 million of customer segregated funds under management at Sentinel. Approximately $1 million was received from Sentinel on Friday, August 17, and another wire is expected on Monday, August 20. Any loss in customer segregated funds resulting from the Sentinel transaction will be borne by Velocity, not its customers.
We are experiencing record volumes, and most of our funds are with other FCMs for trading or on deposit with banks. In particular, Velocity has approximately $18 million of customer segregated funds with Fortis Clearing US, Fortis Bank London, FIMAT, and Bank of America.
If any Velocity customers wish to withdraw funds, Velocity is offering free wire transfers to all its customers this week to show our confidence and good faith. We hope our customers will continue to do business with Velocity. We thank all of our customers for their continued support.
VELOCITY MANAGEMENT
Although I am not a client I commend you for coming on here like this. This is the way to handle your business. Best of luck to you and your company.
Quote from kinggyppo:
Although I am not a client I commend you for coming on here like this. This is the way to handle your business. Best of luck to you and your company.
I agree. I hope you can pull through this.
BTW, did you know that Sentinel was putting cash reserves into 33 year paper?
The Securities and Exchange Commission filed civil fraud charges against Sentinel Management Group Inc., an investment adviser whose problems helped roil the markets last week, in a move that could rewrite the history of last week's market turmoil.
The SEC is also seeking a temporary restraining order to freeze the proceeds from Sentinel's sale of assets to Citadel Investment Group.
Sentinel manages short-term cash for hedge funds and futures brokers. Last week, Sentinel sent a letter to clients saying it was halting redemptions due to the ``liquidity crisis'' in the credit markets. ``We are concerned that we cannot meet redemption requests without selling securities at deep discounts to their fair value and therefore causing unnecessary losses to our clients,`` the letter said. Sentinel filed for bankruptcy court protection Friday. That caused tremors throughout the commodity and futures markets.
Now, the SEC says the firm's explanation was false, and for several months leading up to Sentinel's Aug. 13 letter, the firm suffered losses due to its ''undisclosed use of leverage, commingling and misappropriation of clients' securities.''
Regulators allege the Northbrook, Ill. firm misappropriated investors' funds by mixing their assets into a house account without alerting them, according to a complaint filed in federal court in Chicago. Sentinel then hid those losses from clients by providing them with misleading account statements, the SEC alleges.
The SEC is asking the judge overseeing the bankruptcy filing to freeze the assets until it has a chance to look over the accounts. They are concerned that some investors may receive more money than they are entitled to, at the detriment of other investors.
The SEC is also seeking a temporary restraining order to freeze the proceeds from Sentinel's sale of assets to Citadel Investment Group.
Sentinel manages short-term cash for hedge funds and futures brokers. Last week, Sentinel sent a letter to clients saying it was halting redemptions due to the ``liquidity crisis'' in the credit markets. ``We are concerned that we cannot meet redemption requests without selling securities at deep discounts to their fair value and therefore causing unnecessary losses to our clients,`` the letter said. Sentinel filed for bankruptcy court protection Friday. That caused tremors throughout the commodity and futures markets.
Now, the SEC says the firm's explanation was false, and for several months leading up to Sentinel's Aug. 13 letter, the firm suffered losses due to its ''undisclosed use of leverage, commingling and misappropriation of clients' securities.''
Regulators allege the Northbrook, Ill. firm misappropriated investors' funds by mixing their assets into a house account without alerting them, according to a complaint filed in federal court in Chicago. Sentinel then hid those losses from clients by providing them with misleading account statements, the SEC alleges.
The SEC is asking the judge overseeing the bankruptcy filing to freeze the assets until it has a chance to look over the accounts. They are concerned that some investors may receive more money than they are entitled to, at the detriment of other investors.
Quote from AAAintheBeltway:
I agree. I hope you can pull through this.
BTW, did you know that Sentinel was putting cash reserves into 33 year paper?
I just don't understand that, what is the advantage of having the long term paper if you are in the money market business? the idea of locking up your cash for 30 years for 5 or 6 percent doesn't make sense. Still no one has really explained what they did to screw up so badly. The last article mentions commingling of funds which is a big no no.