Sentinel Continues To Knock 'Em Out Of The Park

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Sentinel, the troubled investment manager that, you'll recall, couldn't figure out which regulatory body to ask permission to halt a massive number of redemption requests earlier this week, is now probably going to be sued over allegations that it sold assets to Citadel without notice, and at discounts of as much as 30 percent to market prices. (Evidently, Sentinel made some calls and ascertained which entity actually holds the authority to freeze withdrawals, so hats off on that front).
Penson Worldwide, the securities-clearing firm taking issue with Sentinel's alleged breach of contract, said, "We believe that to liquidate such a portfolio at such a discount to market value constitutes, among other things, a reckless disregard of industry fair practice responsibilities by all parties involved," and estimates that it will lose $6.5 million unless the sale is reversed.
PW noted-with conviction-that it will "pursue all legal remedies." Going after a bunch of people who aren't even playing with a full deck, that we get. Fish in a barrel, those birds that were released for Cheney to kill. Easy. Pie. But don't fuck with something that Citadel is even tangentially part of. The Griffins have made a cottage industry of helping hedge funds that can't help themselves (Amaranth, Sowood, etc), and will be making their profit off of "unforeseen market volatility," "the idiocy of others," or "Brian Hunter," breach of contract or not.
Penson Says Sentinel Sold Its Assets to Citadel Without Notice [Bloomberg]

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