A gavel rests on its sounding block with a several law books and a justice scale out of fucus in the background. A cool blue cast dominates the scene. (A gavel rests on its sounding block with a several law books and a justice scale out of fucus in t
iStock

A purported hedge fund trader who admitted to defrauding investors has been sentenced to four years in jail and ordered to pay back investors.

In 2020, the Ontario Securities Commission (OSC) charged three men — Nathanael Anthony Aikman of Coquitlam, B.C., along with Syed Saad Aziz and Jazib Ali Khan of Toronto — in connection with an alleged fraud involving a Toronto-based hedge fund, Yonge Street Capital LLC (YSC). The hedge fund took in $6.2 million from 71 investors, purportedly to invest in securities and crypto.

Aikman pled guilty to one count of fraud and one count of trading securities without registration in November 2023.

“Aikman admitted that he fabricated the returns generated from his trading activity. A significant percentage of the money obtained by this fraud was used by Mr. Aikman for purposes unrelated to YSC’s business, and to the detriment of investors,” the OSC said in a release.

The regulator said Aikman was sentenced on Monday to four years in jail and ordered to pay more than $3.9 million in restitution by Justice Rondinelli of the Ontario Court of Justice in Toronto. Aikman was sentenced in absentia, the OSC said, as he didn’t turn up at his sentencing hearing.

“We intend to seek a Canada-wide warrant for his arrest,” said JP Vecsi, senior public affairs specialist at the OSC. Vecsi declined to comment on Aikman’s suspected whereabouts.

The co-accused in the case were previously convicted of lesser charges, and were not found guilty of fraud.

In 2022, Khan was convicted of unregistered trading and illegal distribution. He received a suspended sentence and two years of probation.

Aziz pled guilty to one count of trading without registration and was given two years of probation. He also agreed to disgorge $60,000 and to accept a 10-year market ban in a 2021 settlement with the OSC.

According to that settlement, Khan and Aziz raised money from investors — primarily friends and family — while Aikman was responsible for trading. In 2019, after they learned that Aikman had lost all the investors’ money, Khan and Aziz alerted police.