A hearing panel of the Investment Dealers Association of Canada has found that Credifinance Securities Ltd. has failed to co-operate with the IDA by failing to provide information and documents.

The IDA had alleged that Credifinance had failed to co-operate during the course of an IDA investigation into the conduct of certain individuals at Credifinance.

Following a disciplinary hearing held on September 18 to 22, in Toronto, the pane released its decision on October 25. The panel found that Credifinance did not respond within the time requested by IDA investigators to two written requests made by the IDA during November 2005.

The first request was to provide answers to undertakings given by various individuals at Credifinance during their interviews which had taken place during September and October 2005. The panel found that Credifinance failed to do anything to fulfill the undertakings until weeks after they were made, and only when called upon to do so. This failure was made worse by the firm’s failure to initiate any contact with the IDA, before or after the deadline fixed for responses to the undertakings, to explain any difficulties in the fulfillment of those undertakings.

The second request involved, amongst other things, production of the backs of certain cheques requested by the investigator. The panel found that although Credifinance knew where the cheques were located and that the IDA was entitled to request them, it made no effort at any time to obtain these documents nor did it communicate with the IDA prior to the expiry of the deadline given for a response to this request.

The panel noted that the obligation imposed by IDA By-law 19.5 is a very important one. Failure to provide information requested in the course of an investigation undermines the integrity of the self-regulatory system and the effectiveness of its operations. The panel also noted that member firm should inform the IDA investigator if there is any problem with meeting a deadline at the very earliest opportunity; otherwise the investigator is entitled to assume the deadline set out will be met.

A penalty hearing has been set for Tuesday, November 14 in Toronto.