Fund Administrator Lent Legitimacy to Swindler, Investor Says

Mutual Shareholder Services LLC, an independent fund administrator, provided false financial information about a fraudulent mutual fund and should be held liable for a remaining $28 million loss, an investment firm and its adviser say.

MSS disregarded red flags associated with the “income collecting 1-3 months T-Bills” mutual fund and “merely repackaged false information provided by the Fund’s founder and manager, Ofer Abarbanel,” Mosaic Financial Ltd. and Accuvest Global Advisors Inc. say. They filed their complaint Oct. 20 in the US District Court for the Northern District of Ohio.

In May, Abarbanel was sentenced to four years in prison for ...