OSC, IIROC seek court approval to distribute ABCP fine proceeds

Share this article and your comments with peers on social media BFI investors plead for firm’s sale Securities regulators are seeking court approval for their plan to distribute the proceeds of settlement agreements to investors that suffered due to the collapse of the market for non-bank sponsored asset-backed commercial paper back in 2007. The Ontario Securities Commission and the Investment Industry Regulatory Organization of Canada said Thursday that they have applied to the Superior Court of Justice of Ontario for confirmation that their proposed plan to distribute funds to investors is permitted under an earlier court order that protected the firms involved in a deal to restructure the failed market from liability. The OSC and IIROC have asked the court to rule that the earlier order does not prevent them from distributing $59.875 million received from five investment dealers in settling ABCP enforcement actions. Keywords Asset-backed securities and commercial paper,  EnforcementCompanies Investment Industry Regulatory Organization of Canada, Ontario Securities Commission PwC alleges deleted emails, unusual transactions in Bridging Finance case Back in June 2008, the Honourable C. Campbell J. approved the restructuring of the ABCP market and made an order releasing the dealers involved from claims against them due to their participation in that market. However, there was an exception to that to allow the OSC and IIROC to investigate and pursue proceedings against firms that were involved, as long as they didn’t make any order requiring restitution or damages to aggrieved investors. Under regulatory settlements that were later reached as a result of their investigations, CIBC/CIBC World Markets Inc. and HSBC Bank of Canada agreed to pay $21.7 million and $5.925 million, respectively, to the OSC; and, Scotia Capital Inc., Canaccord Financial Ltd. and Credential Securities Inc. agreed to pay $28.95 million, $3.1 million and $200,000, respectively, to IIROC. The regulators have been holding those settlement funds in segregated accounts since those sanctions were paid. In their application, the regulators argue that the funds were paid voluntarily by the firms, not as part of an order or award of restitution, and they are now seeking to payout those funds to ABCP investors who bought paper from the firms between July 25 and August 13 2007, in advance of the market’s seizure. The application outlines the regulators’ proposed plan to distribute the funds to eligible investors. In her affidavit, deputy director of enforcement at the OSC, Katy Daniels, indicates that a committee of three commissioners has been formed to consider OSC staff’s recommendations for distributing the funds to harmed investors, and, as a first step, the committee has recommended seeking confirmation that the earlier order doesn’t prevent this move. The application is scheduled to be heard on March 13 in Toronto. Related news James Langton Mouth mechanic turned market manipulator Facebook LinkedIn Twitter read more