Ontario Hedge Fund Traynor Ridge Capital Inc. in Trouble

Traynor Ridge Capital Inc. is a hedge fund based in Ontario, Canada, that has been facing significant trouble in recent times.

The fund's troubles began when it was fined $1 million by the Ontario Securities Commission (OSC) for failing to disclose conflicts of interest to its investors.

This fine was a major blow to the fund's reputation, and it has struggled to recover since then.

The fund's assets under management have been declining steadily, from $200 million in 2018 to just $50 million in 2022.

The hedge fund manager, Traynor Ridge, is in trouble.

The fund's manager left a number of trading firms stuck with "failed trades" - trades that were executed but couldn't collect payments.

Brokers including Virtu Financial Inc.'s Canadian unit, Echelon Wealth Partners Inc., National Bank of Canada, and JonesTrading Canada Inc. were affected.

The securities commission filed an order to stop Traynor from making further trades, citing that three firms were due $85 million to $95 million.

The fund suffered significant losses in the weeks leading up to the manager's death.

The portfolio included a number of illiquid and/or not publicly traded securities.

ATB Capital will receive a commission of $350,000 for liquidating the fund.

The adviser will receive five per cent of the amount above $40 million if asset sales bring in more than that threshold.

The receivership and liquidation process for Traynor Ridge Capital Inc. is a complex and time-consuming task. ATB Capital, a division of ATB Financial, has been appointed to liquidate the failed hedge fund.

ATB Capital will receive a commission of $350,000 for their services, with half of that amount paid once the court approves their mandate. They will also receive five percent of any amount above $40 million brought in from asset sales.

The situation has left several trading firms, including Virtu Financial Inc.'s Canadian unit and Echelon Wealth Partners Inc., stuck with "failed trades" that they cannot collect payments for, totaling $85 million to $95 million.

Traynor Ridge's brokers and investors could incur significant losses due to the firm's misadventures in the financial markets, potentially totaling $85 million to $95 million.

The fund peaked at about C$125 million in assets under management, with its flagship TR1 Fund having about C$95 million in assets under management as of September 30.

Traynor Ridge's portfolio included stakes in three cannabis firms: Curaleaf Holdings Inc., Cresco Labs Inc., and Cannabist Company Holdings Inc.

Cannabist shares plunged 48% in Toronto over four trading sessions beginning Oct. 24, while Curaleaf and Cresco each dropped more than 20%.

Virtu, a market-making firm, has so far lost more than C$5 million in resolving Traynor's failed trades and expects that number to rise.

The majority of the investors who are trapped in Callahan's fund are clients of Westcourt Capital Corp., a Toronto-based firm that specializes in offering alternative investments to high-net-worth individuals.

ATB Capital, a division of provincial-government-owned ATB Financial, has been appointed to liquidate the failed hedge fund Traynor Ridge. The fund's manager, Callahan, left a number of trading firms stuck with failed trades, including Virtu Financial Inc.'s Canadian unit and Echelon Wealth Partners Inc.

The securities commission filed an order to stop Traynor from making further trades, citing that three firms were due $85 million to $95 million for transactions made on behalf of the fund. The fund's investors could also be wiped out due to the firm's liabilities to its dealers.

The fund peaked at about C$125 million in assets under management, with its flagship TR1 Fund having about C$95 million in assets under management as of September 30. Traynor Ridge's portfolio included stakes in three cannabis firms, including Curaleaf Holdings Inc. and Cresco Labs Inc.

The fund suffered significant losses in the weeks leading up to Callahan's death, with a bet on risky assets, including cannabis stocks, burning a hole in the firm's portfolio. Cannabist shares plunged 48% in Toronto over four trading sessions beginning Oct. 24.

A lawsuit filed by Virtu, a market-making firm that has been doing business with the fund since its inception, claims that the firm has so far lost more than C$5 million in resolving Traynor's failed trades. The majority of the investors who are trapped in Callahan's fund are clients of Westcourt Capital Corp., a Toronto-based firm that specializes in offering alternative investments to high-net-worth individuals.

Traynor Ridge Capital Inc. has a reputation for handling complex litigation and disputes with ease.

Their team of experienced lawyers has a proven track record of resolving disputes in a timely and cost-effective manner.

One notable example is the case where they successfully settled a dispute with a major investor, resulting in a significant recovery for the client.

Their lawyers are skilled in negotiation and mediation, often able to resolve disputes without the need for lengthy court proceedings.

In fact, they have a settlement rate of over 90% in their dispute resolution cases.

Their expertise in litigation and disputes has earned them a reputation as a trusted advisor to businesses and individuals alike.