The Ontario Securities Commission (OSC) announced on Friday that it will be holding a hearing next Wednesday, Feb. 10, to consider a possible no-contest settlement with Toronto-based mutual fund giant CI Investments Inc. for allegedly understating the net asset value (NAV) of certain funds.
The notice published by the OSC indicates that the proposed settlement will be on a no- contest basis, which means that CI would not have to admit to any wrongdoing. The terms of the agreement will only be publicly revealed if the deal is approved, which would be the third no-contest settlement since Ontario introduced the procedure.
The allegations against CI note that the fund firm self-reported the issue to the OSC in June 2015, indicating that it had systematically understated the NAV of certain funds for five years due to unrecorded interest earned by the funds. The allegations indicate that CI has begun taking corrective action, including strengthening internal controls and paying compensation to investors in 23 mutual funds and 69 segregated funds who were affected by the issue.