A number of hedge funds in Canada and the US have hit the headlines accused of secretive and nefarious dealings. SAC Capital, a $7 billi...

A number of hedge funds in Canada and the US have hit the headlines accused of secretive and nefarious dealings. SAC Capital, a $7 billion hedge fund founded by Steven Cohen, has been hit with a $4.6 billion lawsuit alleging insider trading, while Norshield Financial Group, one of Canada’s first hedge funds, has gone into financial meltdown, to the dismay of its investors. Norshield investors will likely get back a maximum of 10 cents for every dollar they invested in the insolvent company, according to reports in the Canadian press. The actual recovery could be as low as three cents and investors might have to wait three years before any money arrives. Montreal-based Norshield was founded in the early 1980s by John Xanthoudakis and it once boasted more than $1 billion in total assets. But it ran into trouble last spring and filed for receivership in June amid investigations by securities regulators in Ontario and Quebec. The receiver, RSM Richter, has said in court filings that most of the money invested in Norshield flowed offshore through a variety of entities in Barbados and the Bahamas, and that little actually ended up in hedge funds. Now a group calling itself “Norshield Investors Advisory Group” is handing out a list of 34 questions they want answered at investor meetings and court proceedings. SAC is accused of colluding with research firms to drive down the stock of Biovail, a Canadian pharmaceutical company, which has a record of taking legal action against hedge funds and other critics. Biovail claimes SAC paid Arizona-based Camelback Research to publish a negative report on the company based on false information that it provided and to delay publication of the report for more than a week while it built a short position in the stock. Biovail, has also named a pharmaceutical analyst at Bank of America, David Maris, who, it claims, was also used by the funds to undermine the company's share price. The civil lawsuit, filed in a New Jersey court, accuses other hedge funds such as Perry Capital and Rocker Partners of profiting from the alleged market manipulation but does not name them as defendants.