SOURCE: Berger & Montague, P.C.

November 23, 2005 10:00 ET

Berger & Montague, P.C. Client Files Class Action Against Bayou Hedge Fund Entities, Citibank, Hennessee Group, Sterling Stamos Capital Management and Others on Behalf of Bayou Hedge Fund

Investors

PHILADELPHIA, PA -- (MARKET WIRE) -- November 23, 2005 -- On November 17, 2005, an investor represented by the law firm Berger & Montague, P.C. (http://www.bergermontague.com) and other investors filed the first class action suit concerning the recent collapse of the family of hedge funds managed by Bayou Management LLC of Stamford, Connecticut. The lawsuit names as defendants Bayou Super Fund, LLC, Bayou No Leverage Fund, LLC, Bayou Affiliates Fund, LLC, Bayou Accredited Fund, LLC, Bayou Offshore Fund, LLC, Bayou Fund, LLC, and other Bayou-related persons and entities; Bayou's principals, Samuel Israel, III and Daniel E. Marino; Bayou's banker, Citibank, N.A.; and hedge fund consultants Hennessee Group LLC, its principals E. Lee Hennessee and Charles J. Gradante, and Sterling Stamos Capital Management, L.P. The lawsuit is filed on behalf of persons who, during the Class Period December 31, 1996 through August 25, 2005, invested funds or maintained investments in the Bayou Hedge Funds, and suffered damages.

Plaintiffs allege that the Bayou Hedge Funds have, almost since their inception in or about 1996, essentially operated as a massive financial sham and Ponzi scheme in which defendants Israel, Marino and others fraudulently lured Class member investors to invest approximately $450 million in the Bayou Hedge Funds, and then unlawfully pilfered and squandered hundreds of millions of those investment proceeds. Defendant Citibank, N.A. is alleged to have facilitated the scheme by allowing defendant Israel to transfer at least some $120 million of the Class member fiduciary funds Bayou had under management to one or more of his own personal bank accounts in Germany and elsewhere. Defendants Hennessee Group LLC, its managing principals.

E. Lee Hennessee and Charles J. Gradante, and Sterling Stamos Capital Management, L.P. are alleged to have facilitated the fraud by failing to conduct proper due diligence of the Bayou Hedge Funds prior to recommending those investments to investors, and by failing to properly monitor those investments. Since the time that the truth about the Bayou fraud began to be revealed beginning August 25, 2005, defendants Israel and Marino have pleaded guilty to multiple criminal charges, and the Bayou Hedge Funds have collapsed. This case is pending in the United States District Court for the District of Connecticut, Civil Action No. 3:05-cv-01762-JBA. If you purchased interests in the Bayou Hedge Funds during the Class Period, you may qualify for membership in the proposed Class. A copy of the complaint can be viewed electronically at www.bergermontague.com.

The law firm of Berger & Montague, P.C. consists of some 65 attorneys concentrating in complex civil litigation, including the representation of institutional and other investors in securities and other investor protection litigation. Among the Firm's many successful representations, Berger & Montague has represented shareholders in securities cases involving Sunbeam, Rite Aid, Waste Management, Drexel Burnham Lambert and numerous other well-known companies. The Connecticut law firm of Koskoff Koskoff & Bieder, P.C. is also serving as plaintiffs' counsel in the Bayou class action.

Contact Information

  • For more information about this class action, please contact:

    Merrill G. Davidoff, Esq.
    Lawrence J. Lederer, Esq.
    Lane L. Vines, Esq.
    Berger & Montague, P.C.
    1622 Locust Street
    Philadelphia, PA 19103
    Phone: 800-424-6690 or 215-875-3000
    Fax: 215-875-4604
    e-mail: Email Contact