From the Globe and Mail: The Ontario Securities Commission should order former hedge fund manager Otto Spork to pay a $1-million fine and disgorge $6.75-million gained from perpetrating a fraud in his now-defunct investment, a hearing was told.
“We need an administrative penalty to be large enough to be a deterrent not only for Mr. Spork, but also like-minded individuals,” OSC lawyer Tamara Center said Wednesday.
Mr. Spork ran Sextant Strategic Opportunities Hedge Fund, sold in Ontario, and two offshore funds. By the time the commission ordered him to stop selling his Canadian fund in late 2008, it was only invested in two private Icelandic glacier companies. He had charged $6.75-million in performance and management fees from July, 2007, to December, 2008, based on the fund’s reported returns.
The former fund manager committed fraud by selling funds with inflated values not supported by third parties, and also “misappropriated money” from these funds by taking $4-million in so-called loans for his personal benefit, the OSC said in last year’s ruling….