Advisers Say They Carry Heavy Portus Burden

Date: Monday, July 17, 2006
Author: Dailyii.com

Investors in Portus Alternative Asset Management may have lost a lot of money, but the ones who advised them to put their money in PAAM in the first place say they have lost something equally valuable – their reputations. “My credibility has gone down from 110% down to maybe 50%,” Bruno Mucci of Aegon Dealer Services Canada told Mark Brown of Advisor.ca, who reported on a creditor’s meeting last week with court-appoint receiver KPMG. “I’ve been fortunate that the clients have stayed with me, but I haven’t seen any more money from them.” Mucci doesn’t deny his responsibility for suggesting Portus, but said, “It is not like we took a product and solid it illegally. It was an approved product on the shelf.” Another adviser, Carmine Mazzotta, says he’s spent about C$9,000 (US$8,000) on lawyer fees on behalf of his clients – which include his mother and uncle – and expects to spend a lot more, maybe up to C$50,000 (US$44,500). Brown says many investors seemed unhappy with the lengthy recovery process – as well as the C$13 million (US$11.6 million)-plus in fees KPMG is poised to receive. For the impatient ones, KPMG Senior V.P. Robert Rusko says two third-party groups – “hedge funds that purchase distressed debt,” says Rusko – have expressed interest in acquiring their claims, Brown reports.