A Canadian hedge fund trader has been sentenced to four years in prison by a court in Ontario after defrauding investors by providing false information about their returns, according to a report by Bloomberg.
Nathanael Anthony Aikman, who pleaded guilty in November to fraud and trading securities without registration, has also been ordered to pay over CAD3.9m ($2.9m) in restitution.
Aikman was a co-founder of Yonge Street Capital, a supposed hedge fund that claimed to invest in various securities and cryptocurrencies. According to a statement from the Ontario Securities Commission, Yonge Street Capital raised more than CAD6.2m from 71 investors over nearly three years. The fund, named after a major street in Toronto, promised substantial returns but failed to deliver.
Regulatory documents revealed that Aikman assured investors of a 25% return on investment. However, much of the money was misappropriated for purposes unrelated to Yonge Street Capital’s business, severely harming investors, according to the OSC.
Aikman’s partners, Syed Saad Aziz and Jazib Ali Khan, were also both convicted of unregistered trading but were not found guilty of fraud. Aikman, who had exclusive access to the brokerage account, provided performance updates to his partners through a spreadsheet.
In August 2019, investors were told that their accounts would be liquidated and they would receive their full balances. However, Aziz discovered that Aikman had falsified the fund’s monthly returns and subsequently filed a complaint with the York Regional Police, according to the OSC.
