Kroll (Cayman) Limited have been appointed joint provisional liquidators of four hedge funds run by the Bayou Group by a judge in the Cayman...

Kroll (Cayman) Limited have been appointed joint provisional liquidators of four hedge funds run by the Bayou Group by a judge in the Cayman Islands. The funds are currently the subject of a large-scale US-based fraud investigation. The funds' operators have been accused of overstating returns and concealing losses. The founder of the Bayou group of hedge funds Samuel Israel III closed down the funds in July citing personal reasons. He subsequently wrote to investors promising the return of 90 per cent of their money within a week and the remainder by the end of August. No money has been returned and Mr Israel has since disappeared leaving a confession and suicide note. The Grand Court of the Cayman Islands has also appointed James Cleaver to protect the assets held in the Bayou Offshore Master Fund, Bayou Offshore Fund A, Bayou Offshore Fund B, and Bayou Offshore Fund C. It has now emerged that Bayou's deceptions go back as far as 1998. The company also used a non-existent accounting firm to audit its financial statements which overstated assets and hid losses in the funds. A website, www.bayoucaymanliquidation.ky, has been set up to provide investors with information on developments in the case.