The former CFO of failed investment dealer Octagon Capital Corp. has agreed to a permanent registration ban, after admitting he failed to report the firm’s capital position properly.
An Investment Industry Regulatory Organization of Canada (IIROC) hearing panel approved a settlement with Christopher John Everest in which the former CFO agrees to a permanent registration ban and a $10,000 fine.
Octagon, an institutional boutique, was suspended by IIROC in 2015 after the self-regulatory organization found the firm to be capital deficient. Octagon subsequently entered bankruptcy.
According to the settlement, Everest did not report the firm’s capital position accurately between February 2015 and November 2015.
IIROC found that Everest improperly recorded a management fee that was charged to Octagon’s parent company as an allowable asset, boosting its reported capital. The fee was inflated.
The settlement notes that Everest, who had no formal training in accounting, genuinely believed that the firm had adequate capital.
IIROC also says Everest did not benefit from the misconduct and has not worked in the investment industry since 2015, leaving him unable to pay a larger fine.
“[He] acknowledges that, if not for his inability to pay, the monetary fine imposed against him would have been significantly higher and that he would have been required to contribute to the costs that IIROC has incurred in this matter,” it states.