develop the Bermudiana Hotel site has been the subject of a two-year investigation by the Ontario Securities Commission (OSC).

Gordon Capital Corporation, said to be one of the most powerful forces in Canadian stock trading, has been investigated by the OSC about bonds, worth more than $1 billion, lent to a Toronto speculator.

After the deal went sour, Gordon was said to have been left $45 million poorer and undercapitalised.

Mr. Jeff Conyers, president of First Bermuda Securities, which is working with Gordon to raise more than $100 million for Bermuda Financial Centre Ltd., said Gordon's predicament would have no impact on the financing of the project.

BFCL's founders plan to turn the site into a first-class business centre which would include a hotel, a convention centre and office building.

"There is basically no connection,'' said Mr. Conyers. "Gordon is not underwriting the development project and is just acting as a financial adviser. We are relying on one individual who is very good. Her client list is impeccable,'' Ms Joslin Bennett, an investment banker and Gordon partner, is said to have been at the core of the Bermudiana development project. Gordon will get eight percent of the preferred shares subscription, launched this week, for its services as financial advisor.

GCC's fees will total 4.1 percent of the entire project financing. The most recent development in the investigation, reported in August, was an unconfirmed agreement between Gordon and the OSC to a cash penalty of between $3.5 million-$4 million for Gordon and a 45-day trading ban for its chairman James Connacher.

Mr. Eric Rachar, Gordon's former head of securities lending and derivative products, has lost his job at Gordon and had his registration to work in the securities business cancelled. He has been banned from trading for a decade.