One can’t blame the public for lumping together all troubled Canadian hedge funds. After all, Boaz Manor has been getting a lot of media attention over the disappearance of hundreds of millions from his Portus Alternative Asset Managemen. Similalry, Norbourg Asset Management has been charged with embezzlement and fraud. Then there’s Norshield Financial Group – which may sound like Norbourg but hasn’t been charged with anything – whose founder, John Xanthoudakis, says in an interview with the Globe and Mail has been the victim of “a media-fed scare that was fueled by unsubstantiated allegations.”
True, his firm’s assets were frozen last year after it dammed redemptions following C$375 million (US$322.8 million) in investor withdrawals, and that act seems to have damned Mr. X. Xanthoudakis blames his bashing on the media coverage of his firm’s ongoing legal conflict with animator Cinar Corp. over offshore investments. That, and a reported lack of cooperation with the Ontario Securities Commission over the redemptions, led to the asset freeze and the appointment of RSM Richter as a receiver to track down some C$300 million (US$258.2 million).
It’s been months since this HF rising star self-exiled himself into the background, but now he’s talking. In his Globe and Mail interview, Mr. X said he is cooperating with regulators, and that he met with Richter for two days last month and has agreed to do what he can to get missing data and records to help account for all the missing money. In fact, he says even now all the money is accounted for.
The reasons for Xanthoudakis’ decision to go public now may have something to do with a reported incident in November where he was beaten up, supposedly by an investor. Mr. X says “misinformation” from the media contributed to that incident.