French bank settles Manulife suit for $611 million

Manulife Financial Corp. said Wednesday it had settled a lawsuit against French bank Société Générale over losses from Portus Alternative Asset Management Inc., a failed Canadian hedge fund company.

In March of 2007, Manulife sued Société Générale on behalf of itself and all purchasers of Portus notes that were sold on the basis that the notes ensured investors would at least get back their principal.

Under the deal Wednesday, the French bank will repurchase $611 million of notes.

Portus was a little-known company that purportedly offered the potential for high returns through a variety of alternative investment vehicles, before it was shut down by regulators.

Manulife, which had been the largest distributor of Portus products, announced soon after the scandal erupted that it would buy up the investments sold by its sales people.

The life insurance and wealth management company said Wednesday that under the settlement, Société Générale continues to deny all of the allegations in the lawsuit.

The settlement is subject to approval by the Ontario Superior Court.

A hearing is scheduled for Dec. 18.