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Cease-trade order continues for Sextant

The Ontario Securities Commission yesterday ordered Sextant Capital Management Inc. to continue to stop sales and trading in its hedge fund until Sept. 17. OSC staff asked for an extension of the cease-trade order that began last December because it needs more time for its probe of the fund, which invested mainly in firms with rights to Icelandic glaciers for the purpose of selling bottled water. The OSC alleges that Toronto-based Sextant Capital Management, and its founder, Otto Spork, were among parties who breached securities law by inflating returns of the Sextant Strategic Opportunities Hedge Fund through self-dealing, and by illegally earning management fees. The extension is needed because Sextant Capital Management has failed to make certain records and documents available to staff, and Mr. Spork, a resident of Iceland, will not return to Canada to be interviewed, OSC lawyer Susan Kushneryk said. "We've had to go to other sources."

© 2007 The Globe and Mail. All rights reserved.

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