Regulators have ordered a Quebec-based fund manager to cease business while the firm is investigated by regulators and police.

At the request of the Autorité des marchés financiers, the Bureau de décision et de révision en valeurs mobilières has ordered Norbourg gestion d’actifs inc., an unrestricted practice advisor, to cease all activities. Norbourg, which is headed by Vincent Lacroix, also acts as a securities adviser on behalf of the Évolution and Norbourg families of funds.

The AMF made the request to BDRVM based on a number of allegations against the firm. It claims that: there’s a discrepancy of $70.7 million between the latest financial statements and the assets under management; Norbourg’s annual financial statements for the past three years contain misrepresentations; almost $69.8 million belonging to investors in the Évolution and Norbourg families of funds was embezzled through various schemes; and, documents were fabricated and falsified in connection with Norbourg operations and following AMF requests in the course of its investigation. These allegations have yet to be proven.

The BDRVM has issued a freeze order on the bank accounts of Norbourg and of the companies related to Lacroix, and it orders the companies not to dispose of their assets. As well, the BDRVM has ordered the Évolution and Norbourg family of funds not to dispose of their assets to securitize assets under management. The regulator has also ordered the suspension of the rights granted by registration to Norbourg and Lacroix as an adviser.

Finally, at the request of the AMF and further to BDRVM’s recommendation, the Minister of Finance has appointed a provisional administrator to administer the property of Norbourg and of certain companies related to Lacroix. The mandate of the provisional administrator is to clarify the situation by valuing the assets currently held in the funds and determining whether Norbourg operations can continue.

The orders for a freeze on assets, cessation of activity and suspension of rights are intended to protect investors, the AMF says. It says that it is also pursuing its investigation to determine whether to launch penal proceedings.

And, it reports that it is also cooperating with the RCMP’s Integrated Market Enforcement Team of Montréal, which has undertaken a criminal investigation in this matter. The purpose of the investigation is to validate the allegations, identify the perpetrators in the matter and determine whether legal proceedings are warranted, the AMF explains. In this regard, the IMET and the AMF carried out several searches this morning in Montréal, Québec City and the Estrie region.

The Investment Funds Institute of Canada issued a statement indicating that it is aware of the news release issued today regarding the AMF’s investigation. IFIC says it is not privy to any of the circumstances regarding the investigation, nor can it comment on an investigation concerning one of its members.