The MFDA has fined the alleged ringleader of a fraudulent hedge fund operation $2 million.
Between September 2005 and 2008, the MFDA alleges Ellen Batac and her four associates operated secretly as Canadian Havaway in Toronto. Some of the accused had day jobs as advisors at legitimate companies and operated Havaway on the side without their employers’ knowledge.
Batac didn’t contest the facts in the case.
The MFDA estimates investors lost $20 million, after Batac and her group promised guaranteed returns of 20% per quarter. Many are family and friends of the group, though the accused wouldn’t tell the MFDA who exactly their clients were.
The MFDA disciplinary panel punished the group for failing to cooperate with investigators, skipping interviews and withholding documents.
“This all but frustrated the MFDA’s ability to conduct any sort of meaningful or even adequate investigation,” the disciplinary panel wrote in its decision.
The MFDA had originally requested that Batac be fined $700,000, which the disciplinary panel raised to $2 million. She’s also permanently prohibited from working with MFDA-licensed members.
Three of her associates were prohibited from working as MFDA dealers for at least seven years and fined between $150,000 and $250,000 each. One associate co-operated with the investigation and will be allowed to practice after completing industry courses.