OSC Panel Finds Otto Spork, Sextant Capital Management Inc., Sextant Capital GP Inc., Konstantinos Ekonomidis and Natalie Spork in Breach of Ontario Securities Act

TORONTO, May 18 /CNW/ - In a decision released today, an Ontario Securities Commission (OSC) panel found, in summary, that Otto Spork, Sextant Capital Management Inc. (SCMI) and Sextant Capital GP Inc (Sextant GP) committed fraud contrary to the Securities Act.

Staff of the OSC alleged that the respondents sold investment fund units of Iceland Glacier Products (IGP) with falsely inflated values, took millions of dollars in fees based on falsely inflated values and directly misappropriated money from investment funds.

The OSC panel found that, in the period from July 31, 2007 to December 31, 2008, as a result of the wrongful inflation of the market price of IGP, the Sextant Strategic Opportunities Hedge Fund L.P. paid performance and management fees totalling $6,934,187, which Otto Spork benefitted from directly or indirectly.  The panel determined that the payments were "unreasonable" and that "these payments made to Otto Spork constitute acts of fraud."

Additionally the panel found that, at Otto Spork's direction, SCMI took advances of over $4,000,0000, that these advances were prohibited loans taken by Otto Spork for his benefit to the detriment of investors and that, in so doing, Otto Spork, SCMI and Sextant GP committed acts of fraud.

The panel also found that the one or more of the Respondents breached their duties as investment fund managers, failed to deal fairly, honestly and in good faith, failed to maintain proper books and records and acted contrary to the public interest.

A sanctions and costs hearing will be scheduled.  A copy of the Reasons and Decision in this matter is available on the OSC website at www.osc.gov.on.ca.

Clients of Sextant who may have questions concerning the receivership of the Sextant Strategic Opportunities Hedge Fund L.P., Sextant Capital Management Inc. and Sextant Capital GP Inc. should visit the PricewaterhouseCoopers website at www.pwc.com/ca/en/car/sextant

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets and confidence in capital markets. Investors are urged to check the registration of any person or company offering an investment opportunity and to review the OSC's investor materials available at www.osc.gov.on.ca

SOURCE Ontario Securities Commission

For further information:

For Media Inquiries:  Wendy Dey
  Director, Communications & Public Affairs
  416-593-8120
   
  Carolyn Shaw-Rimmington
  Manager, Public Affairs
  416-593-2361
   
  Dylan Rae
  Media Relations Specialist
  416-595-8934
   
For Investor Inquiries:  OSC Contact Centre
  416-593-8314
  1-877-785-1555 (Toll Free)


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