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The Investment Industry Regulatory Organization of Canada (IIROC) has set Tuesday, December 9, 2008, as the hearing date for William John Marston, one of the central figures in failed Mount Real group of companies.

Mount Real came under investigation in June 2005 for its links to the failed hedge fund promoter Norshield Financial Group. Mount Real was originally spun out of Norshield and had been issuing promissory notes since 1993, claiming they were exempt securities. At first, it issued the notes on its own; later the issuance was transferred to three other companies.

Marston will face allegations that, between February 2004 and November 2005, he accepted 72 off-book orders, worth about $5.3 million, for promissory notes issued by Mount Real affiliates MRACS Management Ltd. and Real Vest Investments Ltd.

In November 2005, Marston also had under his responsibility the accounts of approximately 106 clients of B2B Trust. These clients held about 42 different securities other than mutual funds, with book value of $10,781,394.28.

Between May 2004 and October 2005, Marston allegedly took 55 orders from 52 clients for the renewal of $150,000 worth of promissory notes from MRACS and Real Vest.

Between November 2004 and November 2005, he allegedly accepted six orders from six clients for the renewal of at least $150,000 in promissory notes.

Between February 2004 and October 2005, he is alleged to have distributed portfolio statements that overvalued the promissory notes, to approximately five clients.

IIROC alleges that the investment was unsuitable for at least one client, based on his age, investment knowledge, investment objectives and risk tolerance. On or about November 2, 2005, he allegedly failed to provide the same with complete and accurate information that he knew or should have known about Real Vest Investments Ltd. before the client invested.

Around December 2005, Marston allegedly provided a third party with information concerning one client without consent.

IIROC initiated the investigation into Marston’s conduct on November 28, 2005. He is no longer a registrant with an IIROC-regulated firm.

At all relevant times, Marston was an employee of former member-firm iForum Securities. At no time were the transactions recorded on the firm’s books.

The president of iForum, Joseph Pettinicchio, was also Mount Real’s president, presenting a conflict of interest, which Marston failed to disclose to clients.

In a related case, IIROC has also set January 12, 2009, as the hearing date for Éric Couture, another iForum employee who allegedly had under his responsibility the accounts of approximately 35 clients of B2B Trust. These clients’ accounts also held MRACS and Real Vest promissory notes, with a book value of about $1.5 million.

Couture also failed to disclose the conflict of interest between iForum and Mount Real.

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USC accepting Quebec RESP incentive applications

(November 26, 2008) USC Education Savings Plans has announced that it has begun accepting applications for the Quebec Education Savings Incentive (QESI) program.

The QESI will provide children who are residents in Quebec and enrolled in an RESP the opportunity to receive up to $3,600 for their future education. The QESI matches 10% on the first $2,500 of annual RESP contributions.

An additional 5% or 10% on the first $500 contributed per year is available to lower income families, via a refundable tax credit paid by the province directly into the RESP.

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Scotia offers premium money market

(November 2008) ScotiaFunds has introduced a Premium Class for the Scotia Money Market Fund, which will require a minimum initial investment of $100,000.

“Creating Premium Class within the fund allows unitholders with investable assets of greater than $100,000 to benefit from a lower management fee, resulting in a higher effective yield,” said Glen Gowland, managing director and head of ScotiaFunds.

The fund invests in high-quality, short-term fixed income securities issued by Canadian governments and corporations.

(11/26/08)