The OSC has issued a cease trade order against Traynor Ridge Capital, an arbitrage hedge fund. Irregularities at the fund left 3 dealers with "potential losses of $85-$95m". Worse yet, the principal passed away, as confirmed by the OSC. Chris Callahan was in his 30s. Rumours are circulating of a suicide.
The firm placed certain trades during the week of October 23rd, but the prime broker (CIBC World Markets) could not "recapture the costs of the trades" according to the OSC. The firm then went unresponsive to CIBC's demands. On Saturday, Callahan's counsel informed the OSC of his passing. The firm had another registered portfolio manager, William Chyz. The sequence of events, the firm's unresponsiveness and the OSC's actions all point to the fact that this not just another hedge fund biting the dust due to performance issues.
Prior to founding Traynor Ridge, Chris Callahan worked for HGC, therefore tracing his lineage to a somewhat illustrious group of arbitrage funds whose patriarch is a mysterious former CIBC Wood Gundy broker, who in turned trained Shawn Kimel, founder of K2 Advisors. K2 begat MMCAP and many other event-driven funds.