Sentinel Management Files for Chapter 11 Bankruptcy

Discussion in 'Wall St. News' started by ASusilovic, Aug 18, 2007.

  1. Sentinel Management Group Inc., a cash-management firm which froze client withdrawals three days ago, filed for bankruptcy after a judge sought to block it from selling assets to hedge fund company Citadel Investment Group LLC.

    Sentinel, a Northbrook, Illinois-based firm that oversees $1.6 billion, stopped the withdrawals Aug. 14, causing brokers Farr Financial Inc. and Velocity Futures LP to sue.

    Farr claimed the freeze blocked access to client funds. Velocity, joining the suit today, sought to keep its own clients' assets from being sold to Citadel because the assets are being sold at a 15 percent discount. The assets may have already been sold, lawyers for both sides told U.S. District Judge Ronald Guzman today in Chicago federal court.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a7CjyeOgWtxs&refer=home

    Opppsss...no deal with Citadel...:(
     
  2. Wow, did this really get released at 11:52 EST on a Friday night?
     
  3. Sentinel managed short term funds for FCMs like Velocity.

    These proceedings, like when Refco imploded, is of vital interest to anyone who has money with an FCM. It sets the precedent.
     
  4. From google cache of
    http://www.sentgroup.com/cta.html

    now obviously unavailable:


    Protect Reserve Cash
    Unmargined cash left with an FCM may be subject to risk. In the event of default, the FCM's excess customer funds may be available to settle deficiencies in the FCM's customer funds account. Sentinel protects you from this risk by investing trading profits in a diversified pool of high quality, money market securities held in bank custody, remote from the claims of any third party. These funds are available in full to meet daily margin calls, but only the amount needed to meet margin is transferred to the FCM. The balance remains protected in bank custody earning interest. To read more about this risk, see "The Illusion of Segregation."
     
  5. Another gem from said website

    Earn High Net Yield
    Sentinel's investment portfolios consistently achieve high money market rates of return. Sentinel generates a net yield superior to most other money market investment options by skillfully balancing a keen understanding of the bond markets with regulatory parameters.
     
  6. Toro KMA

    Toro KMA

  7. nkhoi

    nkhoi Moderator

    anybody here affect by this?
     
  8. While others are content to lob silly one-liners, I'm glad someone here has the intelligence to realize what happens here should be of interest to anyone who has an account with an FCM.

    oh wait ..... a possible alternate hypothesis is that vast majority of posters *don't* have an account with an FCM.
     
    #10     Aug 18, 2007