Federal Court Bars Investors’ Claims Against Hedge Fund Administrator

Hedge fund investors sued hedge funds’ prime broker and custodian, their former administrator and their former auditor for fraud, alleging that that the defendants should have known that the funds’ manager was actively engaged in fraud, and that the defendants should have warned plaintiff investors.  We detail the precise allegations, the applicable legal standards, the outcome and the potential implications of the case for future investor suits against third party hedge fund service providers.

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