Norshield suspended by Ontario regulator

(May 20, 2005) The Ontario Securities Commission has temporarily suspended Norshield Asset Management and imposed conditions against the Montreal-based hedge fund firm and its retail division, Olympus United Group.

Norshield is the manager and advisor of a variety of hedge funds and alternative investment products offered across Canada by Olympus, the OSC said in a statement issued late Friday afternoon. These products are sold as shares in the Olympus United Funds Corporation. At present, Olympus Funds has approximately 2,000 shareholders, the majority of whom are in Ontario, the commission adds.

At the beginning of May, Olympus announced the deferral of redemptions in a number of its funds. On May 13, the registration of Olympus was suspended because Olympus was operating without a registered trading and compliance officer.

“To date, Olympus has not sought registration for a trading advisor in Ontario nor has it designated a compliance officer,” the OSC says. “Olympus therefore does not meet the registration requirements that would enable it to trade on behalf of its Ontario clients.”

The OSC, Quebec’s Autorité des Marché Financiers (AMF) and the MFDA have been reviewing the operations of Norshield and Olympus in Quebec and Ontario since the beginning of the week.

“During the review, 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,” the OSC says.

“In the circumstances, the temporary orders suspending registration, precluding redemptions and requiring retention of a monitor by May 25, 2005, were made in the public interest to assist in protecting client funds while the joint review is ongoing.”

Quebec regulators issued a cease trading order today against Olympus for failing to file its annual financial statements within the prescribed time period.

“Our primary concern is ensuring that investors are protected,” said AMF president Jean St-Gelais. The OSC has scheduled a Norshield hearing for June 3.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com