Downfall of a Hamilton investment star

Terry Bedford faces lifetime securities ban

Terry Bedford used to be a soughtafter investment adviser, promising clients he had the system that would make them rich. That was in 2012. Now the Hamilton-based analyst is a convicted fraud artist facing a lifetime ban from the securities markets.

In a notice released earlier this week, the Ontario Securities Commission says it will seek that ban against the one-time star found guilty of cheating clients of almost $5 million US.

From 2000 to 2011, Bedford collected more than $19.4 million from 24 American and Canadian investors. They were told their money was going into Bedford’s $200-million Greyhawk hedge fund, a pool of capital earning im- pressive returns in the markets, all supposedly backed up by audited financial statements from the prestigious firm of PricewaterhouseCoopers.

It collapsed when an investor noticed an error and called PwC, only to be told it had never prepared financial statements for Greyhawk.

In a panic, investors pulled more than $10 million from Greyhawk and then filed a civil suit.

Later, Bedford said in a long interview with Greyhawk’s courtappointed receiver he didn’t dispute the charges.

“I’m not going to contest anything. I’m not going to contest the clients’ rights to my assets. They can have them. To be honest, they are owed them,” he said. “I’m not going to contest them taking … large parts of my future earnings … In my opinion they’re owed that and they deserve it.”

As investors squabbled in court over how the $4.5 million found in Hamilton bank accounts should be divided among them, the OSC started looking at the situation and on March 30, 2012, charged Bedford with a single count of “engaging in an act … relating to securities that he knew or reasonably ought to have known perpetrated a fraud.”

Bedford pleaded guilty and was sentenced to two years in a penitentiary, admitting in an agreed statement of f acts filed in court “that he had orchestrated the fraud by misleading investors into believing that Greyhawk … was a highly profitable investment fund providing substantial returns to Investors.”

Aside from its statement of allegations, the commission refused further comment on its effort to have Bedford banned.

The OSC will ask for an order permanently banning Bedford from trading in or acquiring securities, from serving as an officer or director of a public company or from acting as an investment fund manager.

Before f alling into disgrace, Bedford was a sought-after commentator on market trends and analysis, penning items for such Internet sites as AOL Finance, MSN Money and thestreet.com.

In the 2003 book “Swing Trading: Power Strategies to Cut Risk and Boost Profits” by Jon Markman ( John Wiley and Sons) and in articles in the magazine Black Enterprise, Bedford argued the wise investor buys when the market is down.

In “Swing Trading,” Bedford was described as a Halifax native whose family moved to Brantford after his f ather retired from the Royal Canadian Navy.

Bedford said he made his first stock purchase when he was 15 with money earned at summer jobs washing dishes. He said he ran a $3,000 stake up to $15,000.

By 18, he was driving a BMW and by the time he graduated from McMaster University he’d earned $100,000 in the stock market.

The sanction hearing is to be held July 22 at 2:30 p.m. at the OSC offices at 20 Queen Street West, 17th floor, Toronto.