Two Tradex Global hedge funds registered in the British Virgin Islands, and their trading advisor, Tradex Global Advisors, have filed a civil complaint against a Cayman Islands-based Solaris Offshore Fund and its associates Solaris Opportunity Fund and Solaris Management, accusing them of a $2.75 million securities fraud.
The civil complaint, filed in Delaware’s District Court in the beginning of February, asserted that the Cayman-based fund, along with its associates both based in Illinois, knowingly misrepresented their activities and capacity to make profits. According to the complaints of investors, misleading representations led them to invest in the defendants’ funds. It is stated in the complaint that the defendants committed securities fraud, common law fraud, breach of fiduciary duty, breach of contract, and negligent misrepresentation arising out of the plaintiffs’ investments in Solaris Offshore Fund.
The BVI-registered funds discovered the fact of fraud in November 2008, and now they are trying to recover their damages from the defendants. They also claimed that there was a “lack of transparency” in the relationship between the Cayman funds.
The defendant’s legal counsel wrote the letter, informing the plaintiffs that the Fund is trying to accomodate numerous redemption requests, and attempting to gain enough liquidity to accomodate the $2 million request. Plaintiffs consider however that the defendants use these as a means to avoid fulfilling the redemption request, which prompted them to file the complaint.