According to Reuters, the managing member of the fallen Connecticut hedge fund, Jeff Marwil, said the company struck a deal with the UT Medical Group Pension Plan, and assured there would be more settlements in the future.
Bayou had filed suit against 25 investors, including UT Medical, in an attempt to regain profits that the hedge fund paid to them before it went under (See Hedge Fund Firm Charged with Fraud Files Bankruptcy ).
The company run, by Samuel Israel III ,was charged in September 2005 with fraud, which the US Attorney in Manhattan claims reached back to 1998 and included the overstatement of investment gains, the understatement of losses and reporting gains to investors when there were actually losses. The suit also alleged that Bayou had created a cover-up accounting firm to certify its financial statements (See Bayou Funds Sued For Fraud ).
Daniel Marino, who had founded the firm with Israel, pleaded guilty shortly after the charges were brought to criminal fraud – charges that included conspiracy, investment adviser fraud, mail fraud and wire fraud (See Bayou Founder Pleads Guilty to Fraud ).