Early last month, it was reported that the US Securities and Exchange Commission had commenced its own investigation into Man Group's alleged involvement in helping PAAM to conceal $175 million in losses.

Man Group subsidiary, Man Financial, which acted as the hedge fund's broker, was accused in a contempt motion filed in a Pennsylvania court in September by Mr Hodgson of helping to disguise the fund's true investment performance by hiding $175 million in losses in a secret account - losses which were not reported to investors.

PAAM, set up and managed by Paul Eustace, was launched last year and raised some $300 million from investors. However, in June of this year the fund collapsed.

The firm's assets, and the money remaining in its hedge funds, have been frozen by the judge overseeing the case, which has been brought by the Commodity Futures Trading Commission (CFTC).

Man Group, the world's largest listed hedge fund company, has rejected allegations that it has failed to cooperate with the US authorities in the investigation, and has stressed that it has handed over more than 4,200 pages of documentation to assist the receiver. The firm has also stated that it intends to cooperate with the SEC enquiry.

"We have an excellent record of regulatory engagement and compliance, and will cooperate fully with the SEC in connection with this review," Man said last month.

However, Mr Hodgson is less than convinced by the firm's stated willingness to cooperate, and speaking with regard to Man Group's alleged unwillingness to furnish him with certain e-mails, computer records and correspondence, he announced recently that:

"Man Financial's interest in self-preservation cannot be countenanced given the importance of the receiver's investigation and the recovery the receiver seeks for investors."