(February 3 – 10:30 ET) – The Ontario Securities Commission has announced a hearing against Waterloo Ont.-based Regal Capital Planners Ltd., one of the industry’s original mutual fund dealers, for failure to supervise a former employee.
The OSC hearing, set for February 8, will consider a settlement of its allegations against Regal. The OSC alleges that Regal failed to properly supervise Pierre Montpellier, a registered salesperson in its Sudbury office. It will consider whether to suspend Regal’s registration, order a cease trade, order the firm to submit to a review of its practices, issue a reprimand, or some other order disciplinary measure. OSC settlements are only made public if approved by the commission.
The OSC alleges that Regal failed to supervise Montpellier, who established his own office under the name Montpellier Group Inc. Montpellier allegedly sold products not approved by Regal, sold unregistered products, and borrowed from clients. Montpellier also sold more than $4 million worth of investments in Foreign Capital Corp., a private Ontario corporation of which Montpellier was one of two officers. Investors were told they’d receive at least 7% per year, but probably 20% per year on the investment. Foreign Capital Corp. was not approved by the OSC.
The OSC says when Regal became concerned about FCC and Montpellier and attempted to investigate, Montpellier became evasive and in December 1998 he left Canada for England. Regal terminated him the following day.
The OSC says 19 people invested approximately $875,000 in FCC after Regal learned of the company.