Wednesday, 25 May 2016
Last updated 6 hours ago
Dec 2 2008 | 9:00am ET
A Canadian insurer has settled a lawsuit over losses in a collapsed hedge fund.
Manulife Financial, which sued Société Général (Canada) last year on behalf of its investors over the SG’s alleged role in Portus Alternative Asset Management’s failure in 2005, Manulife was the largest investor in Portus, which imploded in 2005. The hedge fund’s co-founders, Boaz Manor and Michael Mendelson, were charged with fraud and money laundering, with the latter pleading guilty. Manor, who fled to Israel after Portus collapsed before returning to Canada last year.
Under the terms of the deal, SG will repurchased C$611 million (US$497 million) in deposit notes backed by Portus-issued securities and now held by Portus administrator KPMG. SG continues to deny any wrongdoing,
Manulife had some C$246 million invested in the principal-protected Portus notes, which it bought from SG. In 2005, the insurer repaid its clients that had invested in Portus on its advice.