Norbourg investors to get $31-million compensation

Almost 1,000 people who lost money in the failure of the Norbourg investment company will getcompensation of up to $200,000 each, Quebec's main financial regulator said Thursday.

L'Autoritédes marchés financiers (AMF)said 925 investors are in line for $31 million from a financial services compensation fund.

Compensation will go to just a tenth of the victims who'd invested money with Norbourg, because only claims relating to fraud committed inthe distribution of financial products and services are eligible.

"In the Norbourg affair, fraud was committed primarilyin connection with the management of mutual funds, and this explains why the majority of the 9,200 victimsare not eligible for compensation," the AMF said in a statement.

But the regulator said a number ofother avenues are still being pursued to helpinvestorsrecovermoney.

"Our top priority is to recover the maximum amount of funds for distribution to defrauded investors," AMF CEO Jean St-Gelais said.

As part of that effort, the AMF is suing Vincent Lacroix, Norbourg's founder,for $94 million.

Norbourg's problems came to light in the summer of 2005 when the AMF discovered a $130-million discrepancy between the company's financial results and its assets under management.

The money management company filed for bankruptcy in October 2005.

In March 2006,the AMF laid 51 securities charges against Lacroix. The regulator said 24 of the charges related to false or misleading information and 27 related to manipulating mutual fund values.

A Quebec judge declared Lacroix bankrupt in May 2006.

Most victims of the Norbourg collapse are from Quebec.