Home Capital Group Inc. is benching two of the key figures at the centre of allegations filed against the mortgage lender last week by the Ontario Securities Commission (OSC).
The Toronto-based company says its current chief financial officer, Robert Morton, will be assigned new responsibilities after first-quarter results are filed next month.
It also says Home Capital founder Gerald Soloway, who was formerly the company’s chief executive officer, will step down from the board of directors once a replacement is found.
A company spokesman says there’s a short list of candidates to replace Soloway but materials for the annual shareholders meeting have already been mailed so he’ll run for re-election and then resign when a replacement is found.
Morton, Soloway and former CEO Martin Reid are facing allegations of misleading Home Capital’s shareholders through financial statements and conference call comments in 2015. Home Capital was also named in the statement of allegations issued late Wednesday by the OSC.
The company has said the allegations against it are without merit and that it will defend itself vigorously. When previously reached by telephone, Reid declined to comment on the allegations.
The company’s stock lost one-fifth of its value on Thursday, closing at its lowest since August 2009, but has recovered some of its losses. At midmorning on Monday, the stock was down 4% at $18.41 — off nearly 18% since the OSC’s allegations.
Home Capital says its interim chief financial officer will be Robert Blowes, who was Home Capital’s CFO from 2012 to 2014.
Read: OSC accuses Home Capital, execs of misleading disclosure