A Chicago fund manager that is closing after near-total losses in last month's U.S. stock market plunge was sued on Tuesday for $16.4 million by Wells Fargo Securities for having allegedly missed required margin payments.

In a complaint filed in Manhattan federal court, the Wells Fargo & Co. unit said it sued LJM Partners Ltd. and its commodity pool after being required, in its role as clearing broker, to cover the company's margin and losses with the Chicago Mercantile Exchange.

LJM failed to make contractually required payments to cover the losses, Wells Fargo said, asking the court to help it recover the money.

LJM, run by Anthony Caine, told clients last week it would return what is left of their money, Reuters reported.

It could be the first investment manager to close after complex trades failed spectacularly in the Feb. 5 reversal of fortune in U.S. stocks that some investors called "vol-mageddon." LJM Partners and an affiliate saw losses of 80 percent or more.

The company had profited from a complex options-market trade that printed money during the market's calm rise in 2017 but later broke down.

Investors are suing Caine and Anish Parvataneni, a portfolio manager at the company who previously worked for well-known fund investor Ken Griffin's Citadel, over what they said were inadequate disclosures about the risks of LJM's approach.

LJM, which along with an affiliate managed more than $1 billion earlier this year, is now likely insolvent, Wells Fargo said.

Phone calls to LJM have not been returned.

In letters to clients last month, Caine, a veteran of the 1990s technology boom who later went into finance, attributed the decline to "an extreme outlier event" in the market.

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