An appeal panel appointed pursuant to Investment Dealers Association of Canada by-law 20 has allowed the appeal of Credifinance Securities Ltd.

Following an appeal hearing held on July 3, an appeal panel allowed Credifinance to appeal a hearing panel decision dated Oct. 25, 2006, that found Credifinance guilty of failing to co-operate with the IDA, namely by failing to respond within the time requested by IDA investigators to two written demands dated Nov. 3, 2005 and Nov. 10, 2005.

With respect to the Nov. 3, 2005 demand, the appeal panel found that new evidence — consisting of transcript excerpts of interviews with three Credifinance employees — demonstrated that it was understood between the parties that no answers would be given until the demand was made and the undertakings given were summarized in a letter that the IDA was to send to Credifinance.

The appeal panel determined that Credifinance was not obligated to provide the information until the demand letter was received. This was contrary to the finding of the original hearing panel that Credifinance had failed to co-operate by taking no steps to fulfill the undertakings it had given until after receipt of the letter dated Nov. 3, 2005. The appeal was therefore allowed.

Considering the demand of Nov. 10, 2005, the appeal panel found that the hearing panel’s decision that Credifinance failed to co-operate with the IDA by virtue of its failure to even try to obtain the backs of certain cheques from its carrying broker could not stand in light of the fact that the conduct was not sufficient on its own to make out the charge that on or about November 2004 to January 2006 Credifinance failed to co-operate with the IDA by failing to provide information and documents as required by the IDA, contrary to by-law 19.5.