Almost a year after the Autorité des marchés financiers — the financial services industry regulator in Quebec — appointed a provisional administrator for and launched its investigation into Montreal-based mutual fund dealer Triglobal Capital Management Inc., the Royal Canadian Mounted Police has confirmed that it is conducting a criminal investigation.

According to documents issued this past summer by Triglobal’s provisional administrator, Jean Robillard of Raymond Chabot Grant Thornton in Montreal, clients of a handful of Triglobal advisors collectively lost more than $86 million when they invested in illegal offshore funds that had been presented to them as conservative investments. Some of the money was lost because of declining markets, but the lion’s share of the money was ultimately funnelled into Focus Management Inc. in the Cayman Islands. The money has disappeared — as have the principal players.

The RCMP is launching its investigation into Triglobal at the request of the AMF, says Sgt. Luc Bessette, a spokesman for the RCMP in Montreal. The RCMP does not normally state publicly that it is investigating anyone — but the confirmation is not without precedence. The RCMP went public with its investigation of the Norbourg group of companies in 2005.

That is not to say the AMF is standing back. On Dec. 2, there will be a hearing at which the AMF will ask the Bureau de décision et de révision en valeurs mobilières to prolong the provisional administration of Triglobal and its network of companies, and to extend the freeze on Triglobal’s assets for yet another 90 days so that the AMF can continue its investigation into alleged infractions of securities laws.

The AMF originally stepped in on Dec. 21, 2007. The current freeze expires on Dec. 8; the freeze order has already been extended three times: on March 18, June 12 and Sept. 2. The BDRVM, a tribunal for securities law, can freeze a company and its assets for only 90 days at a time. Presuming the conditions that required the original freeze order still exist, the order will be extended.

Among those named in the request for an extension on the freeze are: Themistoklis Papadopoulos, the president of Triglobal; Mario Bright, who ran the offshore funds (Focus in the Cayman Islands, and Ivest Fund Ltd. and Tricap Futures Fund Ltd. in the Bahamas) via a network of companies in Canada and abroad; and Papadopoulos’s wife, Anna Papathanasiou.

The freeze mainly affects a set of interconnected companies: Triglobal, Société de gestion de fortune Triglobal inc., PNB Management inc., 2967-9420 Quebec Inc., 3769682 Canada Inc. and Ivest Fund Ltd. Part of the problem has been that neither Papadopoulos nor Bright have been present for — let alone, have participated in — any of the proceedings. In fact, since Papadopoulos and Bright have made themselves scarce, the BDRVM has allowed the AMF to use media releases as a means of notifying the participants of the Dec. 2 hearing in Montreal.

Two former Triglobal advisors — Brian Ruse and David Mizrahi — will no longer be covered by the freeze. Earlier this year, Mizrahi sued the AMF to have his mutual fund licence reinstated; while the BDRVM turned him down, the civil court overruled the tribunal’s decision on June 3, reinstating Mizrahi. In the appeal to get his licence back, Mizrahi said he had placed some $1.5 million of his clients money in Focus — pleading ignorance of the true nature of the investments he was recommending.

When Robillard took over as provisional administrator of Triglobal in December 2007, it was clear that most Triglobal advi-sors were not recommending the offshore products. Only a small group of advisors close to Bright and Papadopoulos had been directing their clients to Ivest, Focus and Tricap. Nonetheless, the freeze left hundreds of advisors affiliated with Triglobal out in the cold.

Promutuel Capital, a subsidiary of Quebec City-based Promutuel Groupe, stepped in and, on Jan. 10, 2008, acquired Triglobal’s advisory network. By taking on 175 of Triglobal’s advisors and more than $1 billion in assets under management, Promutuel became one of the top five mutual fund dealers in the Quebec market — taking its AUM to $1.7 billion from $600 million.

That acquisition has given Promutuel’s financial planning channel more credibility, says Serge Roy, senior vice president of marketing and business development with Promutuel. Clients and advisors alike were thrilled that Promutuel provided stability.

@page_break@More than 90% of advisors who made the transition from Triglobal to Promutuel are still there. By February or March, says Roy, the notoriety had pretty much evaporated and advisors were able to get back to business. IE