Canadian regulators have appointed a receiver to take over hedge fund Sextant Capital Management, whose founder has been charged with inflating the value of its funds.

A judge in Toronto approved the naming of PricewaterhouseCoopers as receiver and manager of the firm’s assets, as well as those of its Strategic Opportunities Hedge Fund and Sextant Capital GP. The court ruled that putting the firm and funds into receivership is in the best interests Sextant clients.

Sextant has been barred from trading since December. The Ontario Securities Commission has charged firm founder Otto Spork, his daughter Natalie, Sextant’s president, and Robert Levack, its chief compliance officer, with illegal self-dealing and inflating the value of the Strategic Opportunities fund. According to the OSC, Sextant inflated the value of Strategic Opportunities and two offshore hedge funds by investing in a pair of private companies with rights to develop Icelandic glaciers. The regulator says that 95% of the hedge fund’s assets are invested in the companies, which are themselves almost totally owned by Spork and the Sextant funds.

Spork has vowed to vigorously defend the allegations. Sextant said the fund was up 159% through the first 11 months of last year before the OSC imposed the ban.

Just because it appears that Mr. Spork is a crook doesn’t mean its not a good idea!!!!