Pentagon Capital sees complaint filing against CEO

LONDON, March 27 (Reuters) - London-based hedge fund firm Pentagon Capital said Thursday it suspended its funds because it expects the U.S. Securities & Exchange Commission (SEC) to file civil complaints against Chief Executive Lewis Chester.

Pentagon, which manages 1.1 billion pounds ($2.21 billion) in assets in 17 funds, said it will close the Pentagon Sterling Multi-Strategy fund, the Pentagon High Performance fund and the Pentagon Investment Capital International fund.

The contents of the complaints are not known, Pentagon said in a statement on Thursday, but it believes they concern CEO Lewis Chester and a now dormant investment fund.

"Pentagon understands that the complaints relate to U.S. mutual fund trading activity conducted by the dormant fund through U.S. regulated broker-dealers during the period 1999-2003, and not to any of the funds," it said.

"Pentagon and Lewis Chester believe there are substantial factual and legal defenses to any civil action that the SEC may bring and intend to vigorously fight the action," it said.

Pentagon will wind down the funds before returning money to investors, it said.

"Pentagon will continue to manage the Funds to maximise value during the period of wind-down, and to return proceeds pro-rata to all investors in the funds as cash becomes available for distribution," it said.

(Reporting by Chris Wills, Editing by Rory Channing)

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