Friday, 24 June 2016
Last updated 7 hours ago
Dec 15 2008 | 1:04am ET
Otto Spork, the Canadian hedge fund manager accused of inflating the values of his fund, is promising to fight the allegations.
“We are going to defend against them vigorously,” Spork told the Globe and Mail of the charges filed by the Ontario Securities Commission last week. He also told the newspaper that he planned to hire a lawyer.
According to the OSC, Spork’s Sextant Capital inflated the value of its Strategic Opportunities Hedge 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 Spork and the Sextant Funds.
“Despite having earned no revenue and having no immediate prospect of doing so, IGP's shares have purportedly increased in value from an initial average cost of €0.226 to €2.45, or approximately 984% since initial investment by the Sextant Fund,” the OSC said in a statement. “There are no third party valuation reports that support the monthly, material upward revisions in value of IGP, and therefore there is inadequate support for the claimed rate of return of the Sextant Fund.”
The Sextant Fund is up 159% year-to-date, according to the firm.