The Portus Files

By Staff | November 22, 2007 | Last updated on November 22, 2007
3 min read

Once one of the fastest-growing fund companies in Canada, Portus has been a three-year nightmare for advisors and 26,000 investors. When it was ordered to stop selling what were marketed as principal-protected notes whose upside would depend on a portfolio of hedge funds, Portus had collected $790 million in client money. That was in February 2005. Only slowly did it come to light that clients hadn’t bought individual principal-protected notes but that, instead, investor money was commingled to purchase notes collectively, with maturity dates extended to 2011.

More than that, Portus deducted $109 million off the top to pay its own expenses, leaving only $529 million invested. Things got murkier when co-founder Boaz Manor left Canada for Israel. Portus receiver KPMG found that $50 million in U.S. client money had never been invested. The receiver recovered some of it, but $17 million is still unaccounted for.

Now, Portus principal Michael Mendelson has pleaded guilty to fraud, in part for using investor money to finance Portus’s operations. Manor is out on bail. The hedge fund investments have a maturity value of $611 million, and KPMG is exploring whether an early redemption is possible. KPMG has also begun paying noteholders cash based on the more than $150 million in uninvested money it has recovered.

Below is an index of’s coverage of Portus since the OSC shut the firm down on February 3, 2005.

2009 / 2008 / 2007 / 2006 / 2005


December 8: Portus case crawls toward resolution


December 23: Manulife settles with MFDA over Portus referral fees

November 26: SocGen settles on Portus suit

April 18, 2008: Portus notes “a bad investment”

April 17, 2008: Portus receiver gets little help from SocGen


October 30, 2007: Manor ordered to return to Toronto

September 26, 2007: Portus founders charged with fraud

July 27, 2007: Some Portus money to flow in the fall

June 29, 2007: Some Portus investors may cash in soon

May 18, 2007: Manor says Portus money “a fantastic story”

March 8, 2007: Manulife sues Portus banker


July 12, 2006: Portus receiver to seek MNPF investors

June 23, 2006: Are advisors being blamed unfairly in Portus fiasco?

June 21, 2006: Portus investors still in the dark on timing of refunds

June 19, 2006: Portus investors to get back more than expected

June 12, 2006: Some Portus investors could soon be repaid

June 2, 2006: First Portus cheques in the mail

April 26, 2006: IFB working on Portus fee repayment plan for insurance advisors

April 25, 2006: OSC lays more charges in Portus probe

April 17, 2006: Receiver finds nearly $600,000 intended for Portus

April 10, 2006: KPMG releases Portus docs, sends claims requests to investors

March 24, 2006: Portus put into bankruptcy

March 16, 2006: KPMG seeks trusteeship in Portus bankruptcy

January 31, 2006: Dealers agree to return Portus fees

January 26, 2006: Portus refund may need more time

January 13, 2006: Dealers to reimburse Portus referral fees


November 29, 2005: Some Portus investors saved at the last minute

November 15, 2005: High-profile lawyer representing Portus co-founder

November 1, 2005: OSC starts limited market dealer sweep

October 26, 2005: Portus founder ordered to remain in Israel

October 14, 2005: Hedge funds could benefit from transparency: author

October 5, 2005: OSC moves against Portus

September 20, 2005: Receiver details Portus investments, recommends bankruptcy

September 12, 2005: OSC “fishing” after Portus: lawyer

July 4, 2005: Survey finds support for hedge regulation after Portus

June 14, 2005: Hedge funds look at marketing promises

May 27, 2005: IDA weighs in on hedge funds, referrals

May 19, 2005: Avoiding litigation: tips from the experts

May 10, 2005: Brown: You can’t sell what you can’t understand

May 4, 2005: Berkshire communicates to clients on Portus

April 21, 2005: Think carefully before referring, lawyer warns

April 18, 2005: Investors should not pay for Portus probe, says IFB

March 31, 2005: Manulife announces details of Portus guarantee

March 30, 2005: Manulife standing behind its customers, says CFO

March 24, 2005: Portus tried to destroy data, investigator says

March 17, 2005Portus fallout: How advisors have been affected

March 8, 2005: Portus fallout part 3: The blame game

March 7, 2005: Helpline established for Portus clients

March 4, 2005: Cold comfort: Manulife still facing questions over Portus

March 3, 2005: Portus fallout part 2: The irate investor

February 22, 2005: Portus fallout: Dealing with worried clients

February 18, 2005: Advisors wary as Portus lays off staff

February 16, 2005: Portus to remain in regulatory limbo

February 11, 2005: Portus hit with further regulatory restrictions

February 10, 2005: Analysts question latest move by Portus

February 3, 2005: Portus temporarily shut down by OSC

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(11/26/07) staff


The staff of have been covering news for financial advisors since 1998.