March 27, 2009 - Madhavi Acharya-Tom Yew
and Nicholas Keung - Staff Reporters -
The Ontario Securities Commission is investigating an alleged Ponzi scheme run by a Toronto businessman that may have raised as much as $60 million, some from the Chinese Canadian community, according to court documents filed this week.
The allegations come a week after the OSC issued a cease trade order on March 17 against Weizhen Tang, who ran Weizhen Tang Corp., Weizhen Tang and Associates and Oversea Chinese Fund Ltd. Partnership. "Evidence obtained by staff demonstrates that recently Tang had been using new funds raised from investors to pay redemptions requested by previous investors," according to documents filed in Ontario Superior Court of Justice on March 24.
Described on his company's website as "the Chinese Warren Buffett," Tang could not be reached for comment yesterday.
Interviewed by the Toronto Chinese-language newspaper Sing Tao Daily last week before the OSC issued the temporary order to cease all trading of his company, Tang said he had been aware of complaints against his company.
But Tang said his business has shifted from securities to foreign exchange and the order would have little impact on his operations.
Tang and his companies have raised funds in Canada, the United States and mainland China, the OSC said in its cease trade order.
From 2006 to 2008, Weizhen Tang and Associates "distributed units of Oversea to members of the public raising approximately $60 million (U.S.)," the court filing reads.
OSC staff has recently received complaints from members of the public "who had placed funds with Oversea China and have been unable to redeem their investments," according to the court documents