Under provisions of the Securities Act, the OSC may apply to the court for an order appointing a receiver and manager "where it is in the best interests of, among others, security holders or subscribers of the company ... or where it is appropriate for the due administration of Ontario securities law."
A hearing is scheduled for April 30.
The OSC, which has an order freezing Sextant's bank accounts, alleges that the fund company and its "driving force" Otto Spork inflated returns of the high-flying Sextant Strategic Opportunities Hedge Fund through self-dealing and reporting dramatically increased values for two glacier companies that are not backed up by third-party valuations.
Sextant had invested in two Luxembourg-based companies that owned the rights to glaciers in Iceland. The companies were to become suppliers of bottled water, but had not generated any revenue or profits, the regulator claims.
The OSC alleges that the two Luxembourg companies are owned almost entirely by the Sextant Fund, the Sextant Offshore Funds, and Mr. Spork.
Mr. Spork denies the allegations.
In earlier filings, the OSC said it was unable to account for more than $90-million in the accounts of Sextant Capital Management Inc.
The regulator said "a combined total of only about $7.6-million is in the custodial accounts of the Sextant Fund and the Sextant Offshore Funds" and argued that "it is appropriate and in the public interest to preserve and freeze the funds that can be traced and are available."
The OSC has also issued a temporary cease trade order against Sextant and its principals, and staff of the regulator will seek to continue the order at a hearing on Monday.
