Manulife Securities Investment Services Inc. has reached a settlement in the lawsuit involving the role of Société Générale in the collapse of hedge fund company Portus Alternative Asset Management Inc.

Manulife launched the class action lawsuit in March 2007 against Société Générale, Société Générale (Canada), Lyxor Asset Management and Société Générale Securities Inc. The lawsuit claimed that Société Générale affiliates failed to engage in due diligence on Toronto-based Portus before accepting deposits from the public.

The lawsuit was launched on behalf of Portus investors, seeking to recover losses they incurred resulting from the failure of the company.

Under the settlement, Société Générale (Canada) has agreed to repurchase roughly $611 million in deposit instruments underlying the Portus investments that are held by KPMG Inc., the trustee in bankruptcy of the Portus estate.

In launching the lawsuit, Manulife said any damages awarded would go to benefit all Portus investors.

“The settlement is in the best interest of all Portus investors,” Manulife said in a statement on Wednesday.

But Société Générale continues to deny all of the allegations in the lawsuit.

The settlement is subject to court approval, which will be sought at a hearing in the Superior Court of Ontario on Dec. 18.

IE