Reuters reports that a hedge fund run by Sample & Cross Capital Management lost 75% of its value in a single day of trading.
Sample & Cross Capital Management was formed by former UBS employees Matthew Sample and J. David Cross, who ran the fund, and suffered heavy losses in August. Sample and Cross told investors in an August 17 letter: “It is with great sadness that we are announcing the closing of the Vega Opportunity Fund…The recent unprecedented market gyrations in the past month required that we take protective action to stem further losses in our strategy.’
Investor losses from soured option trades by the Vega Opportunity Fund could approach $100 million, according to securities lawyer Andrew Stoltmann, who is representing some investors, the news report said.
The complaint filed late last month with the American Arbitration Association accuses Sample and Cross of violating the antifraud provisions of Illinois securities law, saying Sample and Cross marketed the hedge fund’s strategy as seeking capital preservation, according to Reuters.