The Ontario Securities Commission has hit failed investment bank Coventree Inc. and a couple of its top executives with $2.25 million in financial penalties. The regulator handed down the sanctions on Wednesday.
Back in September, the OSC found Coventree and executives Geoffrey Cornish and Dean Tai violated disclosure rules when they failed to inform the market about material changes in the asset-backed commercial paper market before that market ultimately failed in August 2007.
Coventree failed investors on ABCP disclosure: OSC
Among other things, the OSC ordered that the firm pay a $1 million fine and $250,000 in costs towards the hearing.
The regulator hit Cornish and Tai with $500,000 penalties each, and one year bans from serving as directors or officers. They were also reprimanded. The reasons behind the sanctions will be released at a later date.
In its decision back in September, the OSC ruled that Coventree failed to meet its continuous disclosure obligations, by failing to disclose a change in the rating methodology for ABCP, and by failing to make timely disclosure of material changes that occurred in the ABCP market in the days leading up to its failure. It also found that Cornish and Tai effectively violated the rules by allowing the firm to fall short of its disclosure obligations.
The OSC brought allegations in the case back in December 2009, and held a 45-day hearing into the case from May to December 2010.