The Ontario Securities Commission (OSC) has suspended the registration of an exempt market dealer that has been suspended by the British Columbia Securities Commission (BCSC) after running into financial trouble.
Thursday’s OSC Bulletin includes the OSC’s decision to suspend the registration of exempt market dealer, League Investment Services Inc. (LISI), amid concerns about the firm’s solvency.
According to the decision, LISI was suspended by the BCSC on November 6 after the firm filed for creditor protection in B.C., along with over 100 other entities, which are part of the League Group.
As a result of the BCSC’s decision, the firm’s registration was automatically suspended in all jurisdictions that belong to the passport system, which does not include Ontario.
Therefore, OSC staff sought their own suspension. The decision indicates that the firm did not oppose the move. The OSC ruled that, in the circumstances, the firm is no longer suitable for registration, saying, “The public should not be exposed to the risk of a registrant that is under court protection from its creditors because it cannot meet its obligations as they become due.”
Earlier this year, the BCSC settled allegations against the firm. It charged that the firm violated securities laws by promoting the securities of a real estate investment trust (REIT) without properly disclosing its connection to the REIT. According to the settlement, the firm agreed to revise the disclosure, and the firm’s principals agreed to pay $250,000 and pass an educational course for EMD reps.