LANCER'S CASUALTIES
By CHRISTOPHER BYRON
July 24, 2003 -- The ripples are spreading from the collapse of New York's Lancer Group hedge fund empire.
In Colorado, an American Stock Exchange-listed company called World Wireless Communications Inc. has run out of money, its employees have been fired, and the company's CEO is now working out of a Super 8 motel room in a suburb outside Denver.
In Boca Raton, Fla., business has ceased for a company named Biometrics Security Technology Inc. on news that its two top officials have resigned after disclosing that the company cannot continue without financial support from the Lancer Group.
From Canada, the University of Montreal Pension Fund has filed suit in a New York state court to recover $100 million it has invested in Lancer. The investment is believed to be one of the largest in the pension fund's portfolio, amounting to nearly 10 percent of its assets.
In South Africa, well-known Coronation family of hedge funds has acknowledged taking a 100 percent loss on its investment in Lancer, amounting to a reported 12 percent of Coronation's international "fund of funds" assets.
And in New York, phones are going unanswered this week at the offices of Lancer itself.
A woman answering the door at Lancer's offices, located in Manhattan's swanky Seagram Building at 350 Park Ave., identified herself as an employee of a company named "Risk Investigations Inc." - a security firm hired by the court-appointed receiver in the case. There were no other signs of activity on the premises.
The Lancer operation, which claimed $1 billion of assets under management as recently as this last winter, was first exposed as a penny stock fraud in a series of articles by The Post last autumn. The fund was shut down two weeks ago by the Securities and Exchange Commission, launching the hunt to recover any Lancer assets.
One key question confronting investigators: Why do many of the fund's loan positions, as reflected in the group's monthly brokerage statements, fail to square up with the stated debt positions, in government filings, of the companies to which Lancer claims to have lent the money?
One source in the case said Tuesday that Bank of America Securities, which prepared Lancer's monthly statements, had agreed to an unusual arrangement regarding the Lancer account: the Lancer portfolio was to be password-protected in the bank's computers so that no one except top officials at the bank's headquarters could see it.
Bank of America declined several requests to discuss the matter, saying it was the bank's policy not to comment on matters under litigation. |
