Receiving a few more client-redemption requests than it would’ve preferred (which you’d think would be zero but is actually more like 2-3, just to keep things interesting), money-market fund Sentinel Management Group asked the U.S. Commodity Futures Trading Commission today to allow it to halt redemptions until those up top can get it together to honor investors’ demands for their money in a timely fashion, CNBC reports. In a letter to clients, Sentinel said, “We had previously thought that the market would return to some semblance of order and that our clients would not join the panic. Unfortunately, this has not been the case.”
If you have a notion as to what gave Sentinel the impression that its clients wouldn’t want to avoid losing money and that everything in the market would work itself out, send it to tips at dealbreaker dot com. Anyone offering anything slightly more elucidating than “That’s what always happened on Full House” and “it’s actually a little-known fact that Sentinel investors all live under one big rock, kind of like a group home” has a copy of Mergers and Acquisitions coming his way.
Update: Greg Newton writes:
This is (potentially) HUGE...While Sentinel is barely a pimple on the wider money-market world, and in the overall scheme of things insignificant in the futures markets, it operates in a specialized niche where the consequences of its failure may spread out of all proportion to its size.
Fund Halts Withdrawals [CNBC]