Man Group subsidiary, Man Financial, which acted as broker to the now defunct hedge fund Philadelphia Alternative Asset Management (PAAM), was accused in a contempt motion filed in a Pennsylvania court in September by the court-appointed receiver Clark Hodgson of complicity in helping PAAM to disguise the fund's true investment performance by hiding $175 million in trading losses in a secret account - losses which were not reported to investors.

Cayman-registered PAAM, set up and managed by former trader 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 has strenuously denied allegations that it has failed to cooperate with the US authorities in the investigation, and has stressed that it has already handed over more than 4,200 pages of documentation to assist the receiver. However, this is seemingly not enough to satisfy Mr Hodgson, who has demanded access to more than 10,000 documents supplied by Man to the CFTC.

In its reply to the contempt motion, Man rejected the receiver's allegations as "scandalous and prejudicial" and argued that Hodgson's demands were "unreasonable, overly broad and unduly burdensome".