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Canadian Fund Manager Ran $60 Million Ponzi Scheme, OSC Says - Bloomberg.com
Canadian Fund Manager Ran $60 Million Ponzi Scheme, OSC Says
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By Joe Schneider
March 26 (Bloomberg) -- A Toronto fund manager oversaw a Ponzi scheme that defrauded investors in Canada, the U.S. and China of about $60 million, the Ontario Securities Commission alleged.
Weizhen Tang, who ran Weizhen Tang Corp. and Oversea Chinese Fund Ltd. Partnership, told investors recently the company had no assets to pay requested redemptions, the OSC, Canada’s main stock-market regulator, said in papers filed in Ontario Superior Court on March 23. A judge yesterday extended a freeze on Oversea’s assets until April 30.
“Tang had been using new funds raised from investors to pay redemptions requested by previous investors,” the OSC said in the filing. That is the classic definition of a Ponzi scheme, named after Charles Ponzi, who was charged with fraud in 1920.
It’s the first allegation of a Ponzi scheme in Canada since a slump in North American stock markets began in June. In the same period, the U.S. Securities and Exchange Commission has filed more than a dozen lawsuits to freeze money raised in alleged Ponzi schemes, including a $65 billion scam run by New York financier Bernard Madoff.
On his Web site, Tang said he began Weizhen Tang Corp. in 2007 in Toronto and was registered “within the framework of the Ontario Securities Act.” Most of his clients are “senior and affluent overseas Chinese” in Canada, the U.S., China, Hong Kong, Taiwan and Malaysia, he said.
The fund invests in stocks, foreign exchanges, futures, options and mutual funds on Wall Street and stock markets in China and Hong Kong, Tang said. The minimum investment is $150,000, U.S. or Canadian.
$15 Million Loss
The OSC said it has evidence that in 2007, Oversea lost about $15 million. Tang told investors the fund made “significant profits,” the OSC said.
Hugh Lissaman, who is listed as Tang’s lawyer in the court documents, didn’t immediately respond to a request for comment.
A phone number listed on Tang’s Web site was answered by a man who identified himself only as Dr. Gou and said he was Tang’s friend and consultant. Gou said Tang wasn’t available to comment and it was too early to discuss the OSC allegations.
The case is Between Ontario Securities Commission and Oversea Chinese Fund Ltd. Partnership. Ontario Superior Court of Justice (Toronto). CV-09-8090.
To contact the reporter on this story: Joe Schneider in Toronto at jschneider5@bloomberg.net.
BNN (Business News Network) : Stories
OSC investigates alleged $60M Ponzi scheme
BNN staff
March 26, 2009
BNN has learned of an Ontario Securities Commission investigation into a potential fraud case that could be among the largest ever in Canada.
Weizhen Tang and his Oversea Chinese Fund Limited Partnership have been given a cease-trade order while the regulator investigates whether the $60-million fund misled investors.
The OSC document alleges that the fund "had been using new funds raised from investors to pay redemptions requested by previous investors."
Amanda Lang has more.
Canadian Fund Manager Ran $60 Million Ponzi Scheme, OSC Says
Share | Email | Print | A A A
By Joe Schneider
March 26 (Bloomberg) -- A Toronto fund manager oversaw a Ponzi scheme that defrauded investors in Canada, the U.S. and China of about $60 million, the Ontario Securities Commission alleged.
Weizhen Tang, who ran Weizhen Tang Corp. and Oversea Chinese Fund Ltd. Partnership, told investors recently the company had no assets to pay requested redemptions, the OSC, Canada’s main stock-market regulator, said in papers filed in Ontario Superior Court on March 23. A judge yesterday extended a freeze on Oversea’s assets until April 30.
“Tang had been using new funds raised from investors to pay redemptions requested by previous investors,” the OSC said in the filing. That is the classic definition of a Ponzi scheme, named after Charles Ponzi, who was charged with fraud in 1920.
It’s the first allegation of a Ponzi scheme in Canada since a slump in North American stock markets began in June. In the same period, the U.S. Securities and Exchange Commission has filed more than a dozen lawsuits to freeze money raised in alleged Ponzi schemes, including a $65 billion scam run by New York financier Bernard Madoff.
On his Web site, Tang said he began Weizhen Tang Corp. in 2007 in Toronto and was registered “within the framework of the Ontario Securities Act.” Most of his clients are “senior and affluent overseas Chinese” in Canada, the U.S., China, Hong Kong, Taiwan and Malaysia, he said.
The fund invests in stocks, foreign exchanges, futures, options and mutual funds on Wall Street and stock markets in China and Hong Kong, Tang said. The minimum investment is $150,000, U.S. or Canadian.
$15 Million Loss
The OSC said it has evidence that in 2007, Oversea lost about $15 million. Tang told investors the fund made “significant profits,” the OSC said.
Hugh Lissaman, who is listed as Tang’s lawyer in the court documents, didn’t immediately respond to a request for comment.
A phone number listed on Tang’s Web site was answered by a man who identified himself only as Dr. Gou and said he was Tang’s friend and consultant. Gou said Tang wasn’t available to comment and it was too early to discuss the OSC allegations.
The case is Between Ontario Securities Commission and Oversea Chinese Fund Ltd. Partnership. Ontario Superior Court of Justice (Toronto). CV-09-8090.
To contact the reporter on this story: Joe Schneider in Toronto at jschneider5@bloomberg.net.
BNN (Business News Network) : Stories
OSC investigates alleged $60M Ponzi scheme
BNN staff
March 26, 2009
BNN has learned of an Ontario Securities Commission investigation into a potential fraud case that could be among the largest ever in Canada.
Weizhen Tang and his Oversea Chinese Fund Limited Partnership have been given a cease-trade order while the regulator investigates whether the $60-million fund misled investors.
The OSC document alleges that the fund "had been using new funds raised from investors to pay redemptions requested by previous investors."
Amanda Lang has more.
