Politics & Regulation

SEC opens formal investigation of PAAMCO

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As the founders of Pacific Alternative Asset Management Company work out how to handle Judge Richard J. Sullivan’s recent judgement on their dispute with Donald Sussman and Franklin Realty Holdings, the $16.6 billion California-based fund of hedge funds now has another curve ball to deal with. According to a letter to investors, the enforcement division of the SEC’s New York regional office have opened a formal investigation.

Following the judge’s decision against PAAMCO Founders, the holding company of PAAMCO, PAAMCO has been fighting what it calls “substantial innuendo” regarding the structure of its seeding deal with Franklin Realty Holdings.