Cayman investment funds flop

Three investment funds regulated by the Cayman Islands Monetary Authority and a fourth unregulated fund were placed in voluntary liquidation this week after the discovery of irregularities in the funds’ trading activities.

Prominent Caymanian businessman Naul Bodden is linked with at least one of the four Cayman-domiciled entities, which are called Grand Island Commodity Trading Fund I; Grand Island Commodity Trading Fund II; Grand Island Income Fund; and Grand Island Master Fund. The first three entities are all registered by CIMA, while the last one is unregulated.

CIMA issued a statement on the matter after meeting with Joint Voluntary Liquidators David Walker and Nick Freeland of PricewaterhouseCoopers this week.

The JVLs were appointed by the shareholders after an extraordinary general meeting on 17 June following the discovery of trading irregularities, CIMA said in its statement.

Contacted on 13 June, Mr. Bodden said CIMA had already been made aware of the situation. He also confirmed the extraordinary general meeting would take place when it did. However, Mr. Bodden said he did not want to make any further comment before speaking to his attorney at Appleby.

Efforts to get further comment from Mr. Bodden have been unsuccessful.

Mr. Bodden’s exact involvement in the funds is not clear at this time. However, in his biography posted on the website of the non-profit organisation Generation Now – of which he is patron – Mr. Bodden is stated to be the ‘Investment Advisor and founder of Grand Islands Commodities Trading Fund’. The website also says Mr. Bodden is the shareholder and director of a number of companies and manages in excess of $100 million of diversified assets.

CIMA’s statement on Wednesday said the liquidators had indicated they will apply to the Grand Court of the Cayman Islands for the liquidation to be brought under the court’s supervision.

‘Court-appointed supervision would give the JVLs greater powers and the ability to be recognised by, and gain assistance from, foreign courts, and would impose a moratorium on claims by third parties,’ the press release stated. ‘It is CIMA’s expectation that the funds will be placed under the supervision of the courts as soon as possible.’

The PwC joint voluntary liquidators did not respond to specific questions about the numbers of investors affected, or the amount of money lost in the funds, by press time.

In addition to the efforts of the JVLs CIMA said it was continuing its own investigation into the matter.

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