Civil suit filed against Bayou, task force planned

The US Attorney for the Southern District of New York, David Kelley, has filed a civil complaint against Bayou Management – a Stamford-based hedge fund manager. In the complaint, filed yesterday, Kelley requested that the firm's funds be frozen.

A spokeswoman for the Office of the Arizona Attorney General told RiskNews that the state authority expects to hand over its findings regarding Bayou’s activities and join the wider federal investigation soon. Back in May, the Attorney General’s Office seized $101 million worth of assets – thought to belong to the hedge fund.

Elsewhere, the mystery surrounding the whereabouts of money invested in Bayou appears to have prompted a broader response. A spokesman for Connecticut’s Department of Banking said Connecticut Attorney General Richard Blumenthal plans to create a task force to review the hedge fund industry with the goal of drafting federal legislation.

Bayou did not respond to RiskNews’ requests to comment for this story.

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