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….
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