In a complaint dated April 13, 2009, Steven B. Cummings and a group of other investors who purchased almost $3 million of limited partnership interests in hedge fund Paramount Partners, LP (Paramount) accused Paramount, its general partner Crossroad Capital Management, LLC, investment adviser Capital Solutions Management, LP, sales agent Capital Solutions Distributors, LLC and their respective principals of securities fraud in connection with the purchase. Plaintiffs alleged violations of various provisions of the federal securities laws and the Minnesota Securities Act, and various other common law claims. Plaintiffs, who purchased their interests in Paramount between 2006 and 2008, brought this lawsuit after the SEC determined that, despite Paramount’s claim to have almost $17 million in assets at the end of 2008, it in fact had only about $1.3 million. We detail the plaintiffs’ factual allegations and legal theories, and the related SEC action.