Jory Capital moving on

Cooney plans on specializing in macroeconomic issues and setting up screens to evaluate various assets and whether they should be held by certain investors. “We’ll communicate with the public,” he says, “[on] what we think is going on in research.”

Cooney had a profile that seemed outsized, given the firm’s small number of brokers – he even had a long-running weekly radio show. But he is no longer registered as a broker.

Jory was suspended by the Investment Industry Regulatory Organization of Canada (IIROC) late last year because of repeated capital deficiencies and compliance issues. Jory had been fined and sanctioned on several occasions. At the time of the suspension, Jory was ordered to stop dealing with the public.

Jory didn’t go out with a bang. Instead, according to Warren Funt, vice president of IIROC’s Western Canadian operations in Vancouver, the firm simply ran out of money: “The end was really a financial end. The Manitoba Securities Commission [MSC] finally agreed that there was no choice at this stage. Jory couldn’t continue.”

Even if Cooney did want to re-enter the brokerage side of the business at some point in the future, he would have to pay off more than $150,000 in fines before he could become registered again.

Cooney hopes to have the grand opening of his new venture sometime in February, by which time he’ll have finalized what his firm will look like and how his research will be disseminated.

One thing is certain, however: the name of the company will remain the same but its location won’t. Cooney recently relocated from a highrise office at the corner of Portage and Main in downtown Winnipeg to more modest accommodations in the nearby Exchange District.

NEWFOUND FREEDOM

Cooney says he will oversee his team of three in Winnipeg and he will continue to tap into other long-standing relationships in Toronto – among the latter, longtime institutional trader Ron Kirby and David Malone, author of The Debt Generation.

Cooney doesn’t believe there’s enough independent research available in the market. (Jory will not provide its research to certain firms in order to avoid potential conflicts of interest.)

“If you look at the global investment houses,” Cooney says, “the conflicts of interest are coming out now. The penalties are huge.

“I think you can’t look at any company,” he continues, “without understanding their off-balance sheet positions and how that’s going to affect them. No [research company] is tackling that in a serious way. People whisper about it.”

Now that Cooney no longer has to answer to regulators, he says, he’s looking forward to his newfound freedom: “It makes it more problematic to do research as a regulated company. Everything you publish is vetted; there’s an editorial process. I don’t see the need for that now.”

Doug Brown, director of legal and enforcement at the MSC, is no stranger to Cooney or Jory, having repeatedly called Cooney on the carpet over the past decade or so. Brown is not expecting to have any future dealings with either Cooney or his firm, as the MSC doesn’t regulate research houses.

“As long as they’re not giving investment advice,” Brown says, “and they’re making comments on the general economic situation, we won’t be [following Cooney].”

Jory’s clients will have to do so from afar. All of the firm’s clients and client assets, along with former Jory broker Harry Ong, moved over to the Winnipeg offices of MGI Securities Inc. last month.

Funt expects that Jory’s suspension from the brokerage business will be indefinite, adding that he takes no joy in that result. His only satisfaction is that he and his team did their job as regulators.

“We succeeded,” Funt says, “in that [Jory’s] clients were protected and suffered only a minimum of inconvenience.”

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