OSC seeks arrest warrant after fraudster sentenced to four years in jail

Ontario’s market watchdog is hunting for a fugitive former hedge fund manager.

Nathanael Anthony Aikman was sentenced on Monday to four years in jail and ordered to pay a $3.9-million fine for defrauding investors in his former hedge fund, Yonge Street Capital LLC. The Ontario Securities Commission told The Globe and Mail on Tuesday that Mr. Aikman did not appear for sentencing and the regulator intends to seek a Canada-wide warrant for his arrest.

In November, 2023, Mr. Aikman pleaded guilty to one count of fraud and one count of trading securities without registration. Between Oct. 27, 2016, and Aug. 30, 2019, the OSC said 71 people invested a combined total of more than $6.2-million in Yonge Street Capital.

“Mr. Aikman admitted that he fabricated the returns generated from his trading activity,” the OSC said in a news release on Tuesday. “A significant percentage of the money obtained by this fraud was used by Mr. Aikman for purposes unrelated to YSC’s business, and to the detriment of investors.”

Mr. Aikman was charged alongside his partners, Syed Saad Aziz and Jazib Ali Khan. Mr. Aziz and Mr. Khan were both sentenced to probation for unregistered trading activities in 2022 and 2023 respectively, though neither of them were found guilty of fraud.

Mr. Aziz was 20 years old when he met Mr. Aikman, according to a November, 2021, OSC statement of allegations. Mr. Aikman acted as a mentor to Mr. Aziz, the statement said, and eventually recruited both him and Mr. Khan to start an investment fund.

“The division of labour was that Aziz and Khan would secure funds, mostly through friends and family, and Aikman would be responsible for managing funds and investments,” the 2021 OSC statement said. “Only Aikman had access to YSC’s brokerage account.”

In early August, 2019, investors in Yonge Street Capital received an e-mail claiming all their accounts had been liquidated for proceeds of more than $10-million and that each client would receive the full balance of their holdings.

”Subsequent to the email to investors, Aziz learned that Aikman had duped him about the nature of YSC’s business, that Aikman had falsified information about YSC’s monthly returns and that Aikman had lost all the investors’ money,” the OSC statement said. “Several of the investors of YSC are family members and acquaintances of either Khan or Aziz.”

Mr. Aikman’s LinkedIn profile continues to list him as the chairman of Yonge Street Capital and that he is based in the Greater Toronto Area. When the OSC first laid charges against Mr. Aikman in December, 2020, he was noted to be a resident of Coquitlam, B.C., though his current whereabouts are unknown.