Two More Executives Leave Manulife Securities

Bruce Norgren, CCO, and Michael Novak, chief legal counsel, have both departed Manulife Securities International, for reasons having to do with the recent allegations brought forth by the Ontario Securities Commission against collapse hedge fund Portus Alternative Asset Management, The Globe and Mail reports. Manulife had a referral agreement with the C$800 million hedge fund.

Last week, it was reported that Greg Gray, president and chief executive, left along with Jeff Plate, manager of investment research.

Tom Nunn, a Manulife spokesman, declined to comment on the situation except to confirm that Novak and Norgern have left the company in the last three weeks. 

These changes, however, are not the first in the past few weeks at Manulife.

Manulife entered into a referral agreement with Portus in August 2003 and referred 8,300 clients, who invested C$235 million in the hedge fund. In March, OCS sentenced the hedge fund into receivership. At the time Portus had 26,000 investors.

Last week, the OSC charged Portus co-founder Bozar Manor with breaching Ontario securities laws, and filed allegations against three other Portus executives. The Canadian regulator says there will be more charges added to the current list as it reviews the lists of dealers who referred clients to Portus.

Manulife guaranteed clients' investments and had to take a $40 million charge in the first quarter because of these guarantees, prompting Manulife Financial CEO Dominic D'Alessandro to call it a "wake-up call" for his company.

Other mutual fund companies and dealers, including Berkshire Group, which referred 2,300 clients to Portus, have asked their independent agents to voluntarily return the fees they earned for these referrals.