Skip navigation

Mutual Fund News

Sextant manager to fight allegations

FUNDS REPORTER

The founder of Sextant Capital Management Inc. vowed yesterday to fight allegations that his firm juiced hedge fund returns by investing illegally in Icelandic glaciers.

"We are going to defend against them vigorously," hedge fund manager Otto Spork said. He did not elaborate, except to say that he was going to hire a lawyer.

The Ontario Securities Commission has issued a temporary cease-trading order against Sextant Capital and related parties to stop selling the Sextant Strategic Opportunities Hedge Fund until Dec. 23. The commission is expected to ask for an extension of the order at a hearing on Dec. 16, so that it can continue its investigation.

Sextant says the fund posted a 159-per-cent return for the first 11 months of this year, despite a brutal bear market. Its assets, which are 95-per-cent invested in two glacier firms that have no revenues, are frozen.

The OSC alleges that Mr. Spork, his daughter Natalie Spork, who is president of Sextant, and Robert Levack, chief compliance officer, breached securities laws prohibiting self-dealing.

Sextant Strategic Opportunities Hedge and two offshore funds are invested in two private glacier companies in which Mr. Spork held "a significant interest," the OSC alleges. The Sextant fund also made advance payments against anticipated future performance fees, and that constitutes a loan to a company owned by Mr. Spork, the commission adds.

The penalties for violating this section of the securities law include a possible fine of up to $1-million.

© 2007 The Globe and Mail. All rights reserved.

Search Fund News


Advanced Search

GlobeinvestorGOLD.com

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.

Free E-Mail Newsletters

  • Morning news headlines
  • Morning business headlines
  • Financial highlights
  • Tech alert
  • Leisure

Sign-up for our free newsletters



Back to top