The leading financial regulator in the United States has signalled a renewed willingness to pursue foreign citizens beyond its borders by freezing the UK assets of a British citizen linked to an alleged American hedge fund fraud.

The US Securities and Exchange Commission (SEC) was granted a court order freezing £500,000 of assets held in the UK belonging to Glenn Manterfield, of Sheffield, whom the SEC had accused of defrauding investors in Lydia Capital, a US hedge fund he co-owned and managed. The move is unprecedented, and unusually aggressive, because the SEC made the freezing application directly to a British court rather than going through a UK agency, such as the Financial Services Authority (FSA), which usually would handle the UK side of such a case.

The FSA confirmed that it was not involved, but otherwise declined to comment on the development.

LeeAnn Gaunt, the case manager for the SEC, said that the regulator had previously used this direct approach only in a small number of cases in the UK but that it would try to do the same in the future. The move is likely to heighten fears about bold American regulators seeking to expand their jurisdiction. Chris Warren-Smith, a partner in the law firm Fulbright & Jaworski, said: “This move is yet another example of the US authorities being prepared to operate in the UK and internationally where others may not. We are seeing this from the US Department of Justice and the SEC increasingly often and it's likely to happen more in the future.”

Mr Manterfield and his business partner, Evan Andersen, a US citizen, are accused of defrauding more than 60 investors in their Lydia Capital hedge fund out of about $34 million (£17.3 million). The SEC has accused the two of materially overstating and, in some instances, fabricating the fund's performance and inventing business partners and other investors in an attempt to make their business appear legitimate. In reality, the SEC contends, the two began siphoning off investors' money into their own accounts before the fund had started trading.

Mr Manterfield could not be contacted for comment. According to the Lydia Capital website, the firm is managed by its receivers, who could not be reached for comment.

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