The Manitoba Securities Commission has reached a settlement with eight of the directors of the failed Crocus Investment Fund.

The labour-sponsored investment fund suspended trading back in 2004 and was ultimately placed in receivership in mid 2005.

Under the terms of the deal released earlier this week, eight of the directors of the fund — Charles Curtis, Peter Olfert, Waldron (Wally) Fox-Decent, Lea Baturin, Albert Beal, Diane Beresford, Sylvia Farley and Robert Hilliard — receive a one-year ban from serving as directors or officers of a public company; and a one-year trading ban, except for trading for their own account.

The settlement notes that they have effectively been under these constraints for over six years while the case has wound its way through the enforcement process. The commission notes that it did not seek any monetary penalties in this case, indicating that one reason is the fact that the board is idemnified by the fund, so any penalties would have been paid out of funds that could still be recovered by investors.

The commission’s allegations in the case include charges that the fund’s prospectus, which was signed off on by the directors, did not contain full disclosure in that the board did not properly value the fund’s shares as the prospectus promised; and that it continued to allow sales and redemptions to take place after it became aware of a material change in the value of the fund’s assets.

However, the settlement also notes that the directors were acting with legal advice, that the fund’s auditors never raised any red flags with its valuation methods, and that the commission isn’t aware of any evidence that the directors acted with dishonesty or improper intent.

Two of the directors have not settled, and their next appearance is scheduled for November 2 at the MSC.