Neil Mather and Alan Roberts, employed by Begbies Traynor, alleged that the Carlyle Capital Corp (CCC) fund collapsed because of a series of poor investment choices made by the management team.
The pair are hoping to recover over $1 billion for creditors of the CCC, which was put into liquidation in March 2008.
According to the law suit, the Carlyle Group is accused of failing to assess the risk of investments in mortgage-backed securities
In the suit, the liquidators said: â[In the] short space of eight months, the entirety of CCCâs capital was spectacularly lost under the reckless and grossly negligent direction, supervision, management and advice of the defendants.â
However, a spokesman for the group, said: âThis suit is without merit. We will vigorously contest all claims and are confident we will prevail.â
The failed, Guernsey-based hedge fund was initially established in 2006 and went public in July 2007.
By Jim Ottewill