Canada's chief securities regulator said late Friday it has suspended the registration of Norshield Asset Management, a unit of a hedge fund group that dropped a bombshell by halting redemptions, Reuters reports
Montreal-based Norshield Financial Group suspended redemptions on an estimated C$370 million ($291 million) of hedge funds this month after it was inundated with requests for redemptions from investors.
The Ontario Securities Commission issued a temporary injunction on Friday suspending Norshield Asset Management and imposing restrictions on the registration of Norshield and Olympus United Group, which sell Norshield products.
Ontario and Quebec regulators along with the Mutual Fund Dealers Association have been conducting a coordinated review of the operations of Norshield and Olympus. Since May 16, according to Reuters.
The OSC said publicly that Norshield and Olympus "have been unable or unwilling to adequately explain the investment structure offered to clients nor have they provided an adequate explanation as to the flow and location of client funds."
Under the terms of the enforcement action, Norshield must also retain by May 25 a monitor to protect client funds while the joint review continues.