CHICAGO -- Sentinel Management Group Inc., the cash management firm serving the U.S. futures industry that filed for Chapter 11 bankruptcy protection, may have violated U.S. securities laws, an attorney for the Securities and Exchange Commission said Monday.

The SEC is also seeking a temporary restraining order against Sentinel, SEC attorney James Davidson said at a hearing in the U.S. Bankruptcy Court in Chicago.

The SEC had concerns "based on violations of the Investment Advisor Act," Davidson said at the hearing, which was being held to determine whether the Bank of New York, which has about $300 million of Sentinel funds, can release those funds to Sentinel clients.

Davidson said the SEC had indications funds had been co-mingled. "We have concerns about the ownership of the funds being held at the Bank of New York," he said.

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