Eric A. Bloom, who was at the helm of Sentinel Management Group Inc.’s collapse seven years ago, began a trial yesterday in federal court for his role in what prosecutors claim was a $500 million fraud with more than 70 victims, Bloomberg News reported yesterday. While prosecutors say that it was one of the largest frauds in Chicago’s history, Bloom contends the implosion was the fault of market forces beyond his control. Sentinel’s downfall was among the first of a swarm as the worst financial crisis since the Great Depression took hold. As a futures commission merchant, Northbrook, Ill.-based Sentinel managed short-term investments for commodity pools, hedge funds, a pension fund and other customers, prosecutors said in announcing the charges in 2012. Heading into August 2007, it had about $2 billion under management, its liquidation trustee, Frederick Grede, said in an interview. Citing credit market volatility, on Aug. 14 the firm froze client accounts preventing withdrawals. Over the next six days, Sentinel was sued by customers demanding access to their money, filed for bankruptcy and was accused by the U.S. Securities and Exchange Commission of co-mingling client funds with its own.
