A panel of the Investment Dealers Association of Canada has found Jory Capital Inc., Patrick Michael Cooney, chief executive and a director of Jory, and Rees Merthyn Jones, chief financial officer of Jory, violated IDA by-laws.

In its decision, the hearing panel concluded that in June 2004:
– Jory violated certain early warning restrictions placed upon it by the IDA by paying an advance in the sum of $10,000 to Cooney, a director and officer of Jory at the time, contrary to IDA By-law 30.3(iv)(3).
– Cooney violated certain early warning restrictions placed upon Jory by the IDA by requesting and permitting the payment of a $10,000 advance to himself, contrary to IDA By-law 30.3(iv)(3), and thereby engaged in conduct that was unbecoming or detrimental to the public interest, contrary to IDA By-law 29.1.
– Jones violated certain early warning restrictions placed upon Jory by the IDA by acquiescing in the payment of a $10,000 advance to Cooney, contrary to IDA By-law 30.3(iv)(3), and thereby engaged in conduct that was unbecoming or detrimental to the public interest, contrary to IDA By-law 29.1.

The early warning system measures an IDA member’s “risk adjusted capital” against certain arithmetical benchmark tests designated to detect the risk of insolvency. If a member fails any of the arithmetical early warning tests or if a member’s condition is unsatisfactory for any reason, the member may be designated in early warning level 1 or level 2. To place a firm in early warning does not indicate that the public is currently at risk, the IDA said in a release.

The penalties to be assessed to Jory, Cooney and Jones will be determined at a penalty hearing on a date to be determined by the IDA’s national hearing coordinator, the IDA’s release said.