The Ontario Securities Commission today approved a settlement agreement reached with F.G. Lee Simpson, the former president and CEO of collapsed investment dealer Thomson Kernaghan & Co., who supervised renegade broker Mark Valentine.

In the settlement agreement, Simpson agreed that he failed to properly supervise the actions of Valentine, the former chairman of Thomson Kernaghan, in a number of specified transactions.

In addition, Simpson agreed that he failed to to ensure that the terms of a loan guaranteed by Thomson Kernaghan were properly disclosed to the Investment Dealers Association of Canada.

The settlement agreement follows a joint investigation conducted by OSC and IDA staff.

In approving the settlement agreement, the Commission made an order permanently prohibiting Simpson from being registered under Ontario securities law, and permanently prohibiting him from acting as an officer or director of any registrant in Ontario. He is also prohibited from acting as a director or CFO of a reporting issuer for five years.

Simpson has agreed to never re-apply for membership in or approval from the IDA anywhere in Canada, or registration under Ontario securities law.

In addition, Simpson was ordered to pay $50,000 towards the costs of the joint investigation.

In approving the settlement agreement, Commissioner Robert Davis commented that the sanctions “reflect the serious nature of the responsibilities” that Simpson held at Thomson Kernaghan.

“Appropriate systems of supervision are critical to ensure investor protection. Significant sanctions will be sought by Staff where individuals have failed to fulfill supervisory duties” said Kelley McKinnon, Chief Litigation Counsel.