MONTREAL -- Quebec's financial regulator is looking into the disappearance of $3.4-million connected to a small mutual fund company with 500 to 700 investors.
L'Autorite des marches financiers is investigating Denis Patry, president of Zenith Management and Research Corp. and Conseillers Planiges.
Mr. Patry allegedly misappropriated $3-million in assets under management belonging to clients and $400,000 in connection with a private distribution that he solicited, the financial regulator said in a statement yesterday.
It also said Mr. Patry was paid about $1.5-million by the Zenith fund on June 15, 2005. The financial regulator also ordered him not to withdraw any money relating to the Zenith fund for the purpose of paying financial research expenses or professional fees.
Mr. Patry is also accused of sending its clients false or misleading financial statements.
The Montreal company still exists, and all of its assets have been frozen, said Philippe Roy, spokesman for the financial regulator.
The Zenith fund was created in January, 2000, and there was $32.9-million in assets under management as of the end of 2002. By 2003, the fund had lower returns and high management fees, and a number of investors had liquidated their investments and left the fund, Montreal La Presse reported.
There was $6.5-million left in the fund as of March, 2005.
Mr. Roy said the investigation isn't complete and could result in criminal charges or a fine.
The provincial financial regulator has suspended Mr. Patry from selling securities for at least three months.
Mr. Patry couldn't be immediately reached for comment, Montreal La Presse said.
© 2007 The Globe and Mail. All rights reserved.
Only GlobeinvestorGOLD combines the strength of powerful investing tools with the insight of The Globe and Mail.
Discover a wealth of investment information and and exclusive features.