The Ontario Securities Commission has added the brother-in-law of Otto Spork, who ran Sextant Strategic Opportunities hedge fund, to the list of those allegedly involved in perpetrating a complex investment fraud. See allegations.
In a revised statement of allegations on Monday, the regulator said that Konstantinos (Dino) Ekonomidis was responsible for marketing the Sextant fund invested in Icelandic glaciers to Canadian investors. As vice-president of corporate development for Sextant Capital Management Inc., he had a "significant and direct involvement in investor relationships for all of the Sextant funds," the OSC said.
Mr. Ekonomidis along with Robert Levack, Sextant's chief compliance officer, and Mr. Sporks' daughter Natalie, who was an officer and director for the firm, "all breached their management duties to that fund to the detriment of investors," the commission says. When reached on his cell phone for comment on Monday, Mr. Ekonomidis hung up.
Mr. Spork was among several parties involved in perpetrating the fraud from July, 2007, to December, 2008, by selling investment fund units at "falsely inflated values," taking "millions of dollars based on falsely inflated values" and "directly misappropriated money from investment funds," the commission alleges.
An OSC hearing on the allegations has been set for next month.
The OSCI alleged the fraud was carried out in the Sextant Canadian fund in Ontario, as well as the Sextant Strategic Hybrid2 Hedge Resource Fund Offshore Ltd. (Sextant Hybrid Fund) incorporated in the Cayman Islands, and Sextant Strategic Global Water Fund Offshore Ltd (Sextant Water Fund). The three funds raised more than $80-million from Canadian and offshore investors.
Last July, an Ontario judge ordered Sextant Capital Management and related entities, including the hedge fund, be put into receivership. PricewaterhouseCoopers was named receiver to ensure any remaining assets in the Canadian fund are managed and potentially distributed.Report Typo/Error