Chairman of hedge-fund firm EIM SA Arpad “Arki” Busson said short sales limits and an the investment account freeze Lehman Brothers Holdings Inc. worsened the global financial crisis, Bloomberg News reports.

“We're not in a credit crunch, we're in a credit halt,” Busson said in an interview in London. “You take short sellers out and you take out 30 to 40% of the liquidity. It creates a vacuum. They are an essential liquidity provider.”

Busson founded Switzerland-based EIM in 1992 after helping raise capital for hedge-fund managers such as Paul Tudor Jones's Tudor Investment Corp. EIM has invested $14 billion for institutional clients in 175 hedge funds.

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