When Portus Alternative Asset Management Inc. collapsed in 2005, more than 20,000 investors were left in limbo and the scandal tarnished the reputation of the Canadian hedge fund industry.
Now Portus co-founder Michael Mendelson, 43, is trying to get back into business after serving six months in jail for fraud. He has started an "executive coaching" service in Toronto that offers advice on various topics including how to increase sales, raise capital, improve financial performance and "expand your personal freedom."
Mr. Mendelson said he has been on a four-year "internal journey into a life-changing transformation" and is writing a book on how to be "conscious in business."
"It has really been a positive transformation," he said. "My purpose in life, as a result of what I've gone through, is to be of service and help other people not to make the mistakes that I made, and find a path to fulfilment."
Mr. Mendelson calls his company, Mikael Meir Inc., which he said is a derivation of his Hebrew name. The company's website features quotes from Mahatma Gandhi, Nelson Mandela and Chinese philosopher Lao Tzu. But there is no direct mention of Portus or its troubled history.
Mr. Mendelson and Boaz Manor started Portus in 2003, quickly making it the fastest-growing hedge fund company in Canada thanks to aggressive marketing. At its peak, Portus had 26,000 clients and about $800-million in assets.
The Ontario Securities Commission put the company into receivership in March, 2005, after launching a probe into its operations.
In 2007, both men were charged with several counts of fraud, money laundering and possession of property obtained by crime. Mr. Mendelson pleaded guilty to one fraud charge and received a two-year prison sentence. He was released on parole after six months.
He is expected to be a star witness for the crown at Mr. Manor's upcoming trial.
Yesterday, Mr. Mendelson said his life went into disarray after Portus collapsed. He said he felt "deep humiliation, a lot of pain" and kept asking himself: "Why is this happening to me?"
He added that he is up front with clients about his conviction.
"I will never sign a contract without disclosing it," he said. "My life is 100 per cent about integrity."
Mr. Mendelson said he is offering more than just advice on business strategy.
"I'm working on this concept that I call 'conscious commerce and conscious leadership,' which is really about realizing that the purpose for all of us in this world right now is to be of service," he said. "And, I'm working on that in my life right now."
He knows there will be skeptics who question his new venture.
"I've got nothing to be ashamed of. I'm not hiding. I have some skills and my experiences have given me a new purpose," he said.
Some former Portus investors were not impressed when told about Mr. Mendelson's business.
"That's really unbelievable," said Manuel Soler, who invested $100,000 with Portus. "How can he have the face to go back into business and try to get people's money?"