NASD Arbitration Panel Finds Banc of America Securities Liable to Circle T Family of Funds for Compensatory Damages

Business Wire, May 9, 2007

NEW YORK -- The Circle T Family of Funds today announced that a NASD arbitration panel, in accordance with the claims filed against Banc of America Securities LLC in December 2005, has ruled in favor of Circle T. In an unprecedented decision, the panel found that Bank of America's prime broker unit was liable for compensatory damages relating to several claims including negligence, breach of contract and breach of fiduciary duty in regard to its client, Circle T Family of Funds.

Mr. Seth Tobias, General Partner of the Circle T Family of Funds, stated that "Although the amount of the award fell short of our expectations, this proves our assertion prime brokers are not totally immune from liability and do have responsibility to monitor their clients' accounts and act accordingly. We now feel this issue is fully behind us and look forward to growing our business."

In June of 2005, Circle T discovered that Mr. Ethan Kass, son of hedge fund manager Mr. Doug Kass, had orchestrated a scheme to defraud the firm in a series of unauthorized trades. The illicit activity resulted in significant losses. Mr. Tobias personally reimbursed investors for all of the losses, then sued Banc of America Securities after determining the prime broker possessed ample knowledge of unusual activity in its accounts, which Kass had concealed from Circle T.

About Circle T Family of Funds

Founded in 1996, Circle T Family of Funds is an alternative asset management firm with nearly $300 million under management. The firm manages several U.S. equity long-short hedge fund strategies.