ICP Asset Management LLC and founder Thomas Priore were sued in New York, accused by fund liquidators of misusing $36.5 million in assets to satisfy margin calls made on a collateralized debt obligation.
ICP managed multibillion dollar collateralized debt obligations known as Triaxx CDOs that invested in mortgage-backed securities. As the value of the securities fell, one of the CDOs that borrowed money under a repurchase agreement faced margin calls, according to a complaint filed today in state court in Manhattan.
“The funds had no obligation to meet such margin calls, and ICP Management and Priore, acting on both sides of the transaction, took no steps to protect the funds,” said liquidators of the two funds, ICP Strategic Credit Income Master Fund Ltd. and ICP Strategic Credit Income Fund Ltd.
Priore and ICP were sued in 2010 by the U.S. Securities and Exchange Commission, which accused them of directing more than $1 billion of trades by the Triaxx CDOs at what they knew were inflated prices, according to the complaint.
Anne Rucker, a lawyer for ICP and Priore in the SEC case, didn’t immediately return phone and e-mail messages seeking comment on the new complaint after regular business.
The case is ICP Strategic Credit Income Master Fund Ltd. v. ICP Asset Management LLC, 650385-2012, New York State Supreme Court (Manhattan).