A hearing panel of the Investment Dealers Association of Canada has fined Emerging Equities Inc. and the firm’s chief executive for failing to maintain adequate capital.

On October 26, the hearing panel considered and accepted a settlement agreement negotiated among Emerging Equities, James Hartwell, the firm’s CEO, and IDA staff. Pursuant to the settlement agreement, the firm admitted that it failed to maintain adequate capital for the month ending Jan. 31, 2001. Hartwell admitted that he failed in his capacity as the ultimate designated person to ensure his firm maintained adequate capital.

The panel assessed a fine of $55,000 against Emerging Equities. Hartwell was fined $15,000 and prohibited from acting in any registered capacity for 12 months. Before re-approval, he must pass the Partners, Directors and Officers exam. EEI and Hartwell were also ordered to pay $15,000 in costs.

In a release, the IDA said that since November 2002, EEI’s systems and financial reporting have substantially improved and have demonstrated no material internal controls or books and records deficiencies.

For a complete summary of facts, please see IDA Bulletin 3347.