The Canadian Investor Protection Fund obtained a court order on Friday that moved suspended brokerage Thomson Kernaghan & Co. Ltd. into trusteeship.

The CIPF said the Ontario Superior Court of Justice appointed Ernst & Young as trustee in the case. The appointment of the trustee will allow the CIPF to continue the transfer of client accounts out of the brokerage.

The Investment Dealers Association of Canada suspended the operations of troubled brokerage Thomson Kernaghan & Co. Ltd. on Thursday, citing a capital deficiency and failure of internal controls on securities transactions.

Thomson Kernaghan must appear before the Ontario District Council within 15 days regarding the order.

The firm has also been directed to immediately cease dealing with the public. Information regarding the transfer of accounts will be communicated as soon as it is available. In the meantime, clients should call Ralph Gaston at (416) 943-5867.

This suspension activated the involvement of the CIPF.

Mark Valentine, the suspended chairman of the firm, has been under investigation by the Ontario Securities Commission and the IDA for his actions as general partner of certain Limited Partnerships. These partnerships include the Canadian Advantage Limited Partnership and the VC Advantage Fund Partnership. His trading of shares in certain over-the-counter securities is also under investigation.

Valentine’s employment with Thompson Kernaghan was suspended on June 13, 2002.

Suspension notice
http://www.ida.ca/Files/Regulation/Bulletins/B3016_en.pdf