OSC: Spork Guilty Of 'Non-Criminal Fraud'

May 20 2011 | 1:33pm ET

A Canadian regulator has ruled that hedge fund manager Otto Spork committed fraud by inflating his funds' returns and overcharging investors.

The Ontario Securities Commission rapped Spork, of Sextant Capital Management, for "non-criminal fraud." According to the OSC, Sextant inflated the value of the Strategic Opportunities fund and two offshore hedge funds by investing in a pair of private companies with rights to develop Icelandic glaciers. The regulator says that 95% of the hedge fund’s assets are invested in the companies, which are themselves almost totally owned by founder Otto Spork and the Sextant funds.

The fees charged were "unreasonable" and the "payments made to Otto Spork constitute acts of fraud," the OSC ruled. The regulator also said that Spork "misappropriated money."

It is unclear whether Spork, who vowed a "vigorous" defense, will appeal the ruling. The OSC is yet to schedule a sanctions hearing.


In Depth

Q&A: Old Hill's Stone On Private Debt, P2P And Credit Bubbles

Jun 6 2017 | 7:52pm ET

While institutional capital continues to flow into the broader private debt sector...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

AIMA: How The U.K.'s SMCR Will Affect U.S. Firms

Jun 20 2017 | 6:29pm ET

U.S. investment managers need to think seriously about how tough new U.K. conduct...

 
Error

From the current issue of