Clients of suspended commodities dealer Barret Capital Management Inc. may be eligible for contingency fund coverage if they lost money due to the firm’s failure.
Earlier this week the Investment Industry Regulatory Organization of Canada suspended the membership of Barret Capital, and the firm stopped dealing with the public, as part of a settlement with IIROC. Its carrying broker, Laurentian Bank Securities Inc., is to facilitate the orderly transfer of client accounts.
In the meantime, the Canadian Investor Protection Fund says that it “understands that Barret Capital has ceased business but does not have complete information as to its financial status.”
Therefore, it notes that customers with accounts at Barret Capital who have suffered, or may suffer, financial loss solely as a result of Barret Capital becoming insolvent may be eligible for CIPF coverage for those losses.
“Such losses must result from the failure of Barret Capital to return or account for securities, cash balances, commodities, futures contracts, segregated insurance funds or certain other property acquired or held by Barret Capital in an account for customers,” it explains. “Losses that do not result from the insolvency of Barret Capital such as losses arising from changing market values of securities, unsuitable investments or the default of an issuer of securities are not eligible for CIPF coverage.”
Claims must be submitted to CIPF by August 11.