BMA Winds Up Investment Fund For Regulatory Breaches - Cumulus Eastern European Property Fund Limited (2017-08-11)

Summary

This is an enforcement notice from the Bermuda Monetary Authority (BMA) announcing that it successfully petitioned the Supreme Court of Bermuda to wind up Cumulus Eastern European Property Fund Limited, a Standard Fund authorised under the Investment Funds Act 2006 (IFA). The winding up order was made on 14 July 2017 and joint provisional liquidators from EY Bermuda Ltd were appointed. The notice is purely informational, reporting a completed regulatory and court action rather than imposing new requirements on the wider industry.

• Breach 1: Failure to prepare annual audited financial statements for the past five years, contrary to section 14(1)(a) of the IFA.
• Breach 2: Failure to prepare audited financial statements for the years ending 31 December 2012, 2014, 2015 and 2016, contrary to sections 6 to 8 of the Fund Rules 2007; a highly qualified, unsigned set of statements was provided for 2013.
• Breach 3: Failure to have an investment manager with day to day control over the fund's property, contrary to sections 3(2)(a) and 14(1)(b) of the IFA.
• Regulatory action: The Authority petitioned the Supreme Court of Bermuda under section 36(1)(b) of the IFA and the Companies Act 1981, resulting in a winding up order and appointment of joint provisional liquidators.

The Authority states the breaches were serious due to their extent and duration and that it no longer had confidence in the fund's ability to manage its affairs for investors' benefit. Enquiries about the liquidation should be directed to the named contacts at EY Bermuda Ltd or the BMA.

Applies to

investment funds, standard funds, mutual funds