The U.S. Securities and Exchange Commission (SEC) has requested the appointment of a receiver to manage approximately $26 million in assets of Gregory Bell-a former hedge fund manager who was sentenced to six years in prison for his involvement in Tom Petters' $3.65 billion Ponzi scheme.

In the motion, which was filed Monday in U.S. District Court in Minneapolis, the SEC requested the appointment of Ronald R. Peterson of Chicago-based Jenner & Block, LLP, as receiver. Peterson is already serving as trustee in the Chapter 7 bankruptcy case of Lancelot Investment Management.

Peterson would be responsible for obtaining the assets of Bell, Lancelot Investment Management, LLC, and other related funds, which were frozen by the court in July 2009. Before the Petters case unraveled, Bell ran hedge fund Lancelot Investment Management. All of the money in the hedge fund was invested in Petters Company, Inc. (PCI), promissory notes.

A hearing on Monday's motion is scheduled for November 10 before U.S. District Court Judge Ann Montgomery.

Peterson said in a Tuesday phone interview that his “best estimate” of the assets of Bell and his funds is $26 million. When asked when victims might expect to see reimbursement from their investments, he said, “I would certainly move as fast as I can.”

Bell pleaded guilty in October 2009, to one count of mail fraud, for which he faced a maximum sentence of 20 years in prison. Federal prosecutors, however, asked for a more lenient sentence on the grounds that Bell cooperated in the investigation surrounding Petters.

In his plea agreement, Bell admitted to misrepresenting payments made to investors by executing 86 sham “round-trip” banking transactions-through which money was wired from Lancelot to PCI and then immediately back to Lancelot. The scheme created the appearance that the money accrued by Lancelot came from payments from PCI on the promissory notes held by Lancelot-which wasn't the case.

Petters was found guilty in December of 20 felony counts relating to fraud, conspiracy, and money laundering, for orchestrating a $3.65 billion Ponzi scheme that spanned a decade. He was sentenced to 50 years in prison in April. His attorney filed a formal notice of appeal later that month.

Douglas Kelley is serving as trustee in the Petters bankruptcy case. He recently filed a long list of clawback lawsuits through which he is attempting to recover funds for investors who were defrauded by Petters' scheme.