Ontario Teachers’ Alternatives Chief Stays at Job, Despite Regulator Ban

Date: Wednesday, April 16, 2003

Ronald Mock, vice president for alternative investments at Ontario Teachers Pension Plan Board, lost his registration with the Ontario Securities Commission as part of a recent settlement for improper supervision of Phoenix Fixed Income Arbitrage LP, a hedge fund that collapsed in January 2000. Without the registration he would not be able to work for any securities business in Ontario, but he will be able to stay at the retirement system, because the employer-sponsored pension fund does not sell investment products or services. Mr. Mock helps oversee around C$4 billion (US$2.8 billion) in hedge fund assets at Ontario Teachers, which is one of the pensions that led the way in making alternative investments. Before he joined Ontario Teachers, Mr. Mock was president and chief executive at Phoenix Research and Trading Corp. He was responsible for fixed-income arbitrage trading, including the activities of Stephen Duthie. According to the Ontario Securities Commission, Mr. Duthie accumulated approximately US$3.3 billion in U.S. Treasury notes in un-hedged and highly leveraged directional bets that violated the fund’s investment parameters. Mr. Mock claimed that he relied on information from Mr. Duthie, but under the settlement he conceded that he failed to supervise the trader in a meaningful way. He has agreed not to apply for registration for five years