Canada's ATB Capital to liquidate failed hedge fund Traynor Ridge
ATB Capital Markets received a mandate to sell the remaining assets of Canadian hedge fund Traynor Ridge Capital Inc., which collapsed after the sudden death of its founder.
The appointment is subject to approval from an Ontario judge, Ernst & Young Inc., Traynor’s court-appointed receiver, said in documents released Dec. 15.
Toronto-based Traynor, which was managing about $95 million at the end of September, was shut down by the Ontario Securities Commission in October following the death of founder Chris Callahan.
The hedge fund manager left a number of trading firms stuck with “failed trades” — that is, brokers had executed trades on behalf of the company but couldn’t collect payments. The situation ensnared firms including Virtu Financial Inc.’s Canadian unit, Echelon Wealth Partners Inc., National Bank of Canada and JonesTrading Canada Inc., according to documents in the case.
The securities commission filed an order on Oct. 30 to stop Traynor from making further trades, adding that three firms were due $85 million to $95 million for transactions made on behalf of the fund.
Friday’s filing of documents by Ernst & Young gives only limited information about what was inside the Traynor funds. Bloomberg has previously reported that Callahan followed arbitrage strategies and had invested in a number of small-cap firms in the cannabis sector.
The documents suggest the fund was trading frantically in the early part of October and that it suffered significant losses in the weeks leading up to Callahan’s death. “The portfolio includes a number of securities that are illiquid and/or not publicly traded.”
ATB Capital, which is a division of provincial-government-owned ATB Financial, will receive a commission of $350,000, of
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