Ron Mock has completed his rise from the ashes of collapsed hedge fund firm Phoenix Research and Trading Corp., putting a controversial failure behind him to become the new chief executive officer of the Ontario Teachers' Pension Plan.
Mr. Mock, 60, was named Tuesday as the successor to Teachers CEO Jim Leech, who is retiring at the end of the year. Mr. Mock is currently Teachers' senior vice-president of fixed income and hedge funds, heading the largest of the pension plan's six major asset management groups.
The appointment makes Mr. Mock just the third CEO to lead the $130-billion fund since its creation in 1990 to manage pension assets for 303,000 current and retired Ontario teachers. The fund was initially headed by Claude Lamoureux, who was succeeded in 2007 by Mr. Leech.
"I am very excited, because it's not every day that someone gets to lead an organization like this," Mr. Mock said in an interview. "Teachers is a leader in this field, and to be the one chosen to lead it, I'm thrilled."
Before joining Teachers in 2001, Mr. Mock was CEO and co-founder of Phoenix Research and Trading, a hedge fund management company that collapsed in 2000 with losses of over $125-million (U.S.).
The failure came after Mr. Mock discovered bond trader Stephen Duthie had secretly taken a massive and unapproved $3.3-billion position in U.S. benchmark Treasuries in 1999.
Mr. Mock notified the Ontario Securities Commission about the discovery and reached a settlement agreement with the regulator in 2003, accepting a six-year prohibition from acting as a director or officer of a public company, and a reprimand after acknowledging he did not do enough to supervise Mr. Duthie's trading. The OSC settlement said Mr. Mock's supervision was "wholly inadequate" and the trading scheme could have been detected with scrutiny.
Mr. Duthie, meanwhile, received a 20-year ban from trading securities or acting as a director or officer of a company after an OSC hearing panel ruled he mispriced and hid a huge volume of unauthorized trading. The panel ruled his conduct was "duplicitous."
Mr. Leech said in an interview the Teachers board considered Mr. Mock's role at Phoenix, but felt he had broken no laws and had been a highly respected leader in his 12 years at Teachers.
"Anybody who has been in the securities business for 25-plus years is going to have some scars – Lord knows, I've got mine," Mr. Leech said. "The name of the game is to make sure you learn, and he learned that the buck stops at the top."
One of the victims of the firm's collapse was Teachers itself, which lost $10-million on investments, Mr. Lamoureux said.
Mr. Lamoureux, who was Teachers' CEO at the time, said he was initially astonished when another Teachers executive suggested the pension plan hire Mr. Mock in its hedge fund division.
But after conducting an investigation, Mr. Lamoureux said he became convinced the failure was the fault of the bond trader and Mr. Mock was not to blame.
"I think he had a rough time for a couple of years after he was hired because the OSC was all over him, when in fact he went to them of his own free will – and many people don't do that," Mr. Lamoureux said. "But we kept him, and I knew that the board of Teachers was very pleased with him when I was there. He did a great job on fixed income when he took that over."
Mr. Lamoureux said fixed income had not been generating high enough returns when Mr. Mock joined Teachers, and he helped turn around its performance.
Mr. Mock is one of five senior vice-presidents at Teachers who run different portions of the fund's investment portfolio.
"He did a fabulous job. I've been at many meetings with him with these hedge funds and you can see that Ron knew more than a lot of people who came to visit us and were trying to sell their stuff."
Mr. Mock said Tuesday he is ready to oversee a far broader portfolio of assets. But with Mr. Leech still in the top job for another seven months, Mr. Mock said it is too soon to talk about his vision for Teachers or any changes he would foresee. .