Activist fund manager Steel Partners is being sued by investors alleging it committed fraud by failing to adequately inform them of plans to list its main hedge fund, in one of the first cases of investors seeking damages against managers tackling the threat of record redemption requests.

The US fund is being sued by shareholders Bank of America and the employee benefits plan of US railroad manufacturer ACF Industries, according to Thomson Reuters. The pair claim that Steel Partners failed in its obligations to investors by not informing them adequately of plans to list its main portfolio, or giving them a chance to vote on the proposal.