The Investment Industry Regulatory Organization of Canada (IIROC) will hold a hearing on Sept. 10 to consider suspending the membership of investment bank Edgecrest Capital Corp., which recently decided to close shop.
According to an IIROC notice published on Wednesday, Edgecrest fell into a capital deficiency back in May, which it soon corrected. However, the firm became deficient once again in late August, and on Aug. 24, it informed IIROC that it would be unable to repair the shortfall. That same day, Edgecrest terminated all of its employees; the following day the firm told the regulator that it was winding up its business and it began the resignation process.
“Edgecrest has begun the process of resigning its membership in IIROC, but is unable to complete that process due to financial limitations as it may not have sufficient assets to fully discharge its liabilities (before subordinated loans) and is capital deficient,” the IIROC notice says.
As a result, IIROC is seeking to immediately suspend the firm, saying, “Edgecrest is in such financial or operating difficulty that it cannot be permitted to continue to operate without risk of imminent harm to the public, other [dealers] or the [SRO].”
The firm has already decided to abandon the business, and the firm consents to the relief being sought, the IIROC notice says.