A Vancouver-based portfolio management firm, Genus Capital Management Inc., has agreed to pay a $90,000 penalty to the B.C. Securities Commission (BCSC) after the regulator discovered that it had failed to file exempt distribution reports or pay nearly $120,000 in filing fees.
The BCSC announced that it has reached a settlement with the firm concerning allegations that it failed to file exempt distribution reports in connection with $380 million in distributions to its discretionary accounts from the middle of 2009 through the end of 2010; and that it failed to keep updated compliance policies in place to ensure it filed those reports.
According to the settlement, in 2005, the BCSC alerted the firm to new statutory exemptions that would require it to comply with additional filing requirements and pay the associated fees. The new obligations took effect in July 2009, and the commission reminded the firm that it now needed to comply with the additional regulatory requirements.
However, in a routine exam in August 2011, the BCSC found that it hadn’t filed the report or paid the fees. The firm quickly corrected the mistake and paid the outstanding filing fees of $118,245. And, in today’s settlement it acknowledges that it was grossly negligent in failing to file the reports, and for not amending its policies to ensure the company met its regulatory obligations.
The agreement also notes that Genus has subsequently implemented changes to its practices and procedures manual to ensure future compliance. It also says there were mitigating factors, including the fact that it cooperated with the investigation, had no prior record of discipline, and that there is no evidence that clients were harmed.