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Caisse de Depot et Placement president Charles Emond ponders a question at legislature committee on finances on Aug. 17, 2020 at the legislature in Quebec City.Jacques Boissinot/The Canadian Press

It’s time for Quebec’s pension giant to tell all about its botched investment in Celsius Network.

The Caisse de dépôt et placement du Québec has previously portrayed its funding of the New Jersey-based cryptocurrency lender as an investing mistake, with chief executive officer Charles Emond suggesting the pension-fund manager bought into the business too soon.

Now, however, New York Attorney-General Letitia James is suing Alex Mashinsky, former CEO and co-founder of Celsius Network, for defrauding investors by making a litany of false statements, concealing the company’s “dire financial condition” and breaking securities laws in a slew of U.S. states.

It’s an eye-popping list of allegations. Sure, none has been tested in court. But with more details emerging about the comical claims that Mr. Mashinsky made to solicit funders, it increasingly appears as if the Caisse, one of the world’s largest institutional investors, was seriously snookered by a crypto clown.

Mr. Mashinsky – a self-described “Robin Hood” who resided in a “Crypto Castle” (in New York, not Sherwood Forest) – repeatedly claimed that Celsius was safer than a bank, according to Ms. James’s lawsuit.

It gets worse. He regularly used crypto lingo to communicate with investors, the court filing said.

Mr. Mashinsky advocated “HODL” (slang for “hold on for dear life”) as an investing strategy, according to the lawsuit.

He also told investors to “ignore the FUD” (another asinine acronym that abbreviates “fear, uncertainty and doubt”) even as Celsius’s liabilities surpassed its assets by hundreds of millions of dollars, the court filing said.

It simply boggles the mind that a sophisticated institutional investor like the Caisse was taken in by such tomfoolery.

That’s why it is incumbent on the Caisse to provide proper answers about how its money managers got mixed up with Celsius and why this investment ever passed their smell test. It’s a matter of maintaining public trust.

To be clear, it’s not the size of its Celsius write-off that’s troubling – US$150-million is a pittance for the Caisse, which has $392-billion in net assets. Rather, it’s the outsized damage this failed investment has done to its storied brand.

After all, the Caisse initially made a big show of backing Celsius, billing it as “the world’s leading crypto lender with a strong management team that puts transparency and customer protection at the core of their operations.”

Millions of Quebeckers count on the Caisse to manage their pension money. It’s not enough to disclose, as Mr. Emond did when the Caisse released its half-year results last August, that a post-mortem was being conducted on the Celsius investment. The public also deserves to know the results.

“We don’t have anything new to add to what we’ve previously said. We’ve addressed this investment extensively at our half-year results,” Caisse spokeswoman Kate Monfette wrote in an e-mail to The Globe and Mail on Thursday.

“And we continue our legal work to defend the interests of our depositors, notably through the ongoing Chapter 11 proceedings,” she added.

Great, but the Caisse recently crowed about becoming the first Canadian pension fund to adopt the CFA Institute Asset Manager Code. Its principles of conduct include communicating with clients on a continuing basis and ensuring that disclosures are complete and contain material facts, including information provided about the investment process.

To be fair, the Caisse isn’t the only major Canadian pension-fund manager that was burned by the recent crypto carnage.

The Ontario Teachers’ Pension Plan invested US$95-million in FTX Ltd. The now-failed cryptocurrency exchange suffered from “a complete failure of corporate controls and such a complete absence of trustworthy financial information,” according to its new CEO, John Ray.

In fact, U.S. prosecutors have accused FTX founder Sam Bankman-Fried of orchestrating a massive criminal fraud.

Much like the Caisse with Celsius, Teachers’ disclosures on its FTX investment were slow in coming and remain incomplete. Teachers took several days to admit the size of its investment and still has only made general statements about its due-diligence processes.

Canadians deserve better.

It should be obvious by now that public pension funds shouldn’t be investing in anything crypto-related because it’s too risky.

Moreover, pension-fund managers must pay closer attention to the financial statements of any growth company they invest in, regardless of the sector.

While FTX and Celsius both had audited financial statements, the accounting firms that signed off on them were obscure and it was unclear whether they had the skills to serve such complex businesses.

Canadian pension funds should only be investing in startup companies that use auditors that are large enough to have their work subject to annual scrutiny by accounting-firm regulators.

If public pension funds won’t take such steps on a voluntary basis, then our elected officials should introduce legislation to mandate such rules.

(South of the border, Ms. James is urging the U.S. Congress to create a law that would ban American retirement funds from investing in digital assets, such as cryptocurrencies, to protect workers’ savings.)

It’s unacceptable for Canadian pension-fund managers to give lip service to transparency.

Mr. Emond told a Montreal audience at the Canadian Club last month that “this is your Caisse.” Exactly.

So, do the right thing and give Quebeckers real answers about the Celsius debacle. Otherwise, they might conclude their Caisse simply ignored the FUD.

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