Sentinel to be overseen by Chapter 11 trustee in light of NFA asset restriction, SEC lawsuit

By Caroline Salls

Pittsburgh, Aug. 23 - Sentinel Management Group, Inc.'s U.S. Trustee was ordered to appoint a Chapter 11 trustee to protect the interests of the company and its creditors because a Securities and Exchange Commission lawsuit and a National Futures Association action are keeping the company from conducting normal operations and dealing with its assets.

According to a Thursday filing with the U.S. Bankruptcy Court for the Northern District of Illinois, the NFA action prohibits Sentinel from dealing with any of the assets in its principal accounts, the "Seg III account" and the "house account."

Sentinel said substantially all of the assets it owns or manages are in those accounts.

In addition, the company said the amount of information being requested in connection with the SEC lawsuit and the NFA action require management to focus substantial amounts of time and resources on providing the requested documents.

As previously reported, Sentinel is being charged with fraud by the SEC in connection with alleged misappropriation, commingling and leveraging of client assets.

Sentinel, a Northbrook, Ill., investment adviser, filed for bankruptcy on Aug. 17. Its Chapter 11 case number is 07-14987.

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