The Ontario Securities Commission (OSC) is to consider a proposed settlement with the former head of a collection of firms in the flow-through limited partnership business.
The OSC will hold hearing tomorrow, Feb. 27, to consider whether to approve a settlement agreement between staff of the commission and Joe Dwek, who headed portfolio manager, Pathway Investment Counsel Inc.; fund manager, MineralFields Management Inc.; and, an exempt market dealer, Limited Market Dealer Inc. — firms that were involved in the distribution and management of flow-through limited partnerships that invested primarily in junior Canadian resource issuers through private placements — between 2002 and 2012. The assets of the three firms was acquired by Marquest Asset Management Inc. in Oct. 2012.
According to the OSC’s allegations, compliance reviews of the firms in 2011 uncovered a number of deficiencies and compliance issues. Among other things, it says that it found instances of inadequate supervision of personal trading and inappropriate personal trading; and, insufficient supervision of compliance activities, which, the OSC says amounts to conduct contrary to the public interest.
In particular, the commission alleges that no one ensured that: employees were properly registered; it was performing adequate due diligence; sufficient know your client information was collected for all clients, or that they met their suitability obligations; conflicts were identified and properly managed; and, that net asset value calculations for the funds managed was computed correctly; among other shortcomings.
The allegations have not been proven. Any penalties agreed in the case will be revealed only if the commission approves the proposed settlement.