Michel Fragasso, the chairman of the Investment Funds Institute of Canada, stepped down abruptly Thursday following RCMP police raids at various Montreal and Toronto offices of Norbourg Asset Management, where he is a senior vice president.

While the police look for falsified documents, Quebec regulators, meanwhile, have ordered Norbourg to cease operation and have frozen its assets. In its latest financial results, Norbourg's assets came up $70.7 million short of its previous financial results, with $84 million remaining, regulators said.

Fragasso is a well-known businessman and entrepreneur who has served as chairman of the institute since December. The institute's board said it "has regretfully accepted the offer by Michel Fragasso to step aside as chair of IFIC, effective immediately."

Replacing Fragasso will be Brenda Vince, president of RBC Asset Management. Vince issued a statement late last week praising her predecessor's contributions to Canada's investment management industry: "It is unfortunate that Michel has stepped aside. He has been an integral voice at IFIC for more than a decade and has been well known for helping to build our industry in Quebec."

The institute said it did not know the nature of the ongoing police investigation, which is being supported by the Autorite des marches financiers (AMF). Authorities are directing any of the 5,000 investors in Norbourg funds concerned about their money to the AMF website.

More than 100 people joined the Royal Canadian Mounted Police in their raid, including locksmiths, forensic accountants and computer technicians, RCMP spokesman Patrice Gelinas told Winnipeg Free Press.

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