A $750 million (€629 million) hedge fund quoted on the Irish Stock Exchange is under investigation by two US regulatory agencies over its valuation policies.
Davy Stockbrokers is the sponsoring broker of the Trinity Fund, which is based in the Cayman Islands and managed by New York-based Clinton Group.
The directors of the Irish-listed Trinity Fund confirmed yesterday that both the US Commodity Futures Trading Commission (CFTC) and the Securities & Exchange Commission (SEC) were scrutinising its policies.
In a statement released to the stock exchange, they said the fund was "co-operating closely" with both authorities and was supplying them with all requested documentation.
The announcement comes almost a month after questions on mis-pricing within the fund were first raised by one of the investment managers that oversaw its operation. Mr Anthony Bardan of Clinton Group, left the group at the end of October saying that he disagreed with the pricing policies of others at the same company and announced his resignation.
At that time, Clinton Group, which manages assets worth some $9 billion, issued a statement expressing surprise at Mr Barkan's departure.
"We take comments of this nature seriously," the company said, adding that it had appointed PricewaterhouseCoopers (PwC) to review the allegations and had replaced Mr Bardan.
Trinity Fund, which is listed in Dublin but domiciled in the Cayman Islands, is one of more than 3,000 investment funds on the Irish Stock Exchange.
It was first listed in Dublin in 1996 and has a minimum subscription of $250,000. It is structured as an open-ended investment company.
The fund has no Irish directors and does not employ Irish lawyers. It is administered in Cayman by Fortis Fund Services (Cayman), with Davy Stockbrokers its only named Irish professional service-provider. Legal counsel is provided by a Cayman-based firm.
Davy did not respond to queries on the matter yesterday, while Clinton referred to its earlier statement.
The Trinity Fund is keen for PwC's investigations to come to a prompt conclusion, according to the statement issued yesterday: "The directors of the fund are anxious to bring this matter to a speedy conclusion and will keep all investors updated with any further developments."
Spokesmen for the CFTC and the SEC said, meanwhile, that they were not in a position to confirm or deny the existence of any investigations. The matter is known, however, to centre around the Trinity Fund's valuation policies and, more particularly, its pricing of asset and mortgage-backed securities.
