Portus Bankruptcy?

Wojtek Dabrowski writes Portus "allegedly used $95.4-million of investors' money to pay its expense, referral fees to brokers and to fund the redemptions of other investors - similar to the notorious schemes operated by Charles Ponzi."

Portus had some 30,000 client accounts with over $800 million invested.

The regulators shut Portus down in February 2005. The RCMP is investigating and KPMG are reporting. KPMG suggests that bankruptcy should be declared.

It seems that our regulatory system is unable to prevent widespread wrongdoing and fraud from happening. The problem investors face is that there is no Authority that provides investor protection. Investors are left at the mercy of an industry that is robbing many investors of their life savings.

Victims only recourse is civil litigation, but that does not help if there are no resources to recover. There must be an investment fund to protect investors that is administered by an Authority with a mandate for investor protection.

At the same time, it seems that the investment industry has been able to get limitation periods reduced in several provinces, including Ontario, from six years to two years. This means that if victims are unable to start a civil action within two years of the action that caused the loss they will be statute barred from taking action.

Victims of Portus will have to move quickly if they plan to take civil action.