Bank of Montreal Stopped Portus Sales in September

Date: Thursday, March 3, 2005

Bank of Montreal, Canada's fourth- largest bank, stopped selling products from Portus Alternative Asset Management Inc. in September, five months before regulators blocked the hedge fund from trading securities or paying clients.
Portus didn't meet Bank of Montreal's ``due diligence criteria,'' Bank of Montreal spokeswoman Kim Hanson said. She didn't elaborate. Toronto-based Portus has about 26,000 clients and C$730 million ($587 million) in assets, according to the Globe and Mail newspaper.
The Ontario Securities Commission, Canada's main stock-market regulator, is investigating whether the investments Portus sells are suitable for individual investors. The regulator's ban, announced last month, is in effect until a hearing in May.
Regulators in Nova Scotia and New Brunswick are also probing the company. An answering machine at Portus' Toronto office said the office was closed. Manulife Financial Corp., Canada's biggest insurer, said today in a Canada NewsWire release that it will guarantee the recovery of any funds its asset-management clients invested in Portus products.