On Aug. 25, police raided the offices of Norbourg Asset Management Inc. in Montreal and Quebec City. The Autorité des marchés financiers said it was investigating allegations that Norbourg's financials contained misrepresentations and that nearly $70 million had been embezzled from investors in its Norbourg and Evolution funds.
Michel Fragasso, chair of the Investment Funds Institute of Canada, immediately resigned–because he is also chair of Evolution Funds Inc., a company that became affiliated with Norbourg in December 2003. IFIC's acting chair, Brenda Vince, offered kind words: “[Fragasso] has been an integral voice at IFIC for more than a decade.”
Fragasso is not the first IFIC chair to depart under a cloud. On June 17, 1998, Dax Sukhraj resigned. He, too, had been “an integral part of IFIC's initiatives,” but was reprimanded for failing to keep a promise made to the Ontario Securities Commission.
The Norbourg allegations, as yet untested in any court, are more serious. Should Fragasso be implicated in wrongdoing, IFIC's credibility would take a drubbing. The organization cannot afford to lose another chair to scandal.