Brighton SPC put into liquidation

The Cayman Islands Monetary Authority advised the public in a notice on Oct. 6 that Brighton SPC was placed into official liquidation. Simon Conway and David Walker of PwC Corporate Finance & Recovery (Cayman) Ltd. have been appointed as joint official liquidators. CIMA also canceled Brighton’s mutual fund registration.

Mr. Conway and Mr. Walker had been appointed first as examiners and then as joint controllers of Brighton by the Authority on June 1.

They found in two reports in May that it was likely that the offering documents misrepresented the diversification, liquidity and trading activity of the fund. According to the examination, the main asset of the fund was a single loan to its holding company, whose asset value appeared to be significantly overstated, and $2 million in payments were made to Citygate, the fund’s prime broker and investor, “without a clear rationale.”

The Cayman Islands Monetary Authority had petitioned the Grand Court to wind up Brighton SPC nearly six months after media reports called the fund’s sponsor and promoter Belvedere Management Group a “criminal financial enterprise” and Brighton a “$130 million Ponzi scheme.”

In its winding up petition, CIMA said the official liquidation would enable the liquidators to use statutory powers to enforce more cooperation from service providers to Brighton, coordinate communications with investors and form a committee and bring actions to recover assets on behalf of Brighton that are likely to be conducted in overseas jurisdictions.