The founders of Bayou Management, the collapsed $450m (€374m) hedge fund firm, have been permanently barred from the securities industry after pleading guilty to fraud last year.

Samuel Israel, the firm's chief executive, and Daniel Marino, chief financial officer, pleaded guilty to charges of conspiracy, investment adviser fraud and mail fraud during a court hearing in September last year. Marino also pleaded guilty to a charge of wire fraud. The two await sentencing for the charges.