Portus Co-Founder Fined For Fraud

Dec 3 2012 | 11:18am ET

Two years in prison will not satisfy Portus Alternative Asset Management co-founder Michael Mendelsohn's debt to society.

The nearly eight year Portus saga, which featured a C$110 million fraud, a co-founder's fugitive stint in Israel, missing diamonds and two surprise guilty pleas, came to an end when the Ontario Securities Commission fined Mendelsohn C$320,000 for his role in the scam. Mendelsohn received the same amount from Portus in the three months before the OSC shut it down in early 2005.

Mendelsohn is unlikely to pay the restitution; he said in October that he could not afford to settle the case. But OSC Commissioner Edward Kerwin wrote that the regulator must "ensure that he not be permitted to retain any financial benefit from his breaches of the act and in order to send a message to the public that the commission does not permit the retention of any funds derived from the contravention of Ontario securities laws."

Mendelsohn was also barred from trading, fund management and promotion, and serving as a director or officer of a public company.

The OSC said Mendelsohn had "gone a ways down the road of remorse," but "not far enough." Still, the regulator gave him some credit for remorse, cooperation and time behind bars.

Mendelsohn pleaded guilty to fraud in 2007.


In Depth

An Interview With Harvest Volatility Management's Rick Selvala

Mar 23 2017 | 5:39pm ET

Several years of extremely low interest rates have pushed some investors into equities...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

SEI: Private Debt Coming Into Its Own

Mar 8 2017 | 9:24pm ET

The explosive growth of private debt over the past few years has caused the lines...