Writ seeks US$206 million in costs and compensation on behalf of 1,300 investors of the collapsed hedge fund
Liquidators launched a group action yesterday to gain US$206.67 million in compensation for 1,300 investors who lost money in the collapse of CSA Absolute Return Fund in one of Hong Kong's highest-profile hedge fund scandals.
They issued writs against the fund's custodian, HSBC Institutional Trust Services (Asia), its administrator, Bank of Bermuda, and its auditor, Ernst & Young.
CSA Absolute Return Fund went into liquidation two years ago after the Securities and Futures Commission launched an investigation and police charged fund manager Charles Schmitt with the theft of US$930,000 from the fund.
Two PricewaterhouseCoopers partners were appointed liquidators of the fund. Yesterday, they sought compensation on behalf of the investors amounting to US$198.37 million and costs of US$8.3 million.
According to the writ, CSA in October 2001 appointed Bermuda Trust (Far East) - which was acquired by HSBC in 2004 and renamed HSBC Institutional Trust Services (Asia) - as the custodian for subscription monies from investors to the funds.