(December 22 – 11:30 ET) – Canadian American Financial Corp. (Canada) Ltd. has agreed to pay the British Columbia Securities Commission $22,500 in penalties and costs after admitting some of its B.C. sales people sold scholarship plans without being registered.

The Ontario-based scholarship plan dealer also admitted to contravening prohibitions in the B.C. Securities Act against cold calling.

Between September 1998 and December 1999, some of CACF’s salespeople were not properly registered in B.C. to sell its scholarship plans. Under the B.C. Securities Act, anyone dealing in any form of security must be registered with the commission.

Between August 22, 2000 and October 18, 2000, CACF also obtained leads from a third party who identified and solicited interest in scholarship plans through a door-to-door survey. This was against the section of the Securities Act that prohibits cold calling.

CACF has agreed to have a registered representative meet with clients who purchased a scholarship plan from an unregistered sales person to ensure the clients are properly informed about the investment and its suitability for them. These clients will be offered an opportunity to return the investment and have their money refunded.

In addition to the financial penalty, any commissions CACF earned on plans that are not rescinded must be paid to the BCSC Investor Education Fund. This amount could total $33,000.
-IE Staff