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(December 23, 2008) Well-known industry veteran Don Coxe will retire at the end of the year. Coxe spent four decades in institutional investing and money management, most recently as global portfolio strategist for BMO Capital Markets.

But Coxe plans to work during his retirement. Next year, he is starting his own independent advisory firm, Coxe Advisors LLC, and will remain as portfolio consultant to BMO’s Coxe Commodity Fund. He will also continue publishing his insights in Basic Points, a portfolio strategy journal.

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Manulife settles with MFDA over Portus referral fees

(December 23, 2008) Manulife Securities has agreed to pay a $200,000 fine, plus $50,000 in costs, for the referral arrangements it had in place with defunct Portus Alternative Asset Management, according to a settlement agreement released by the Mutual Fund Dealers Association.

The fines stem from Manulife’s failure to disclose syndication fees it received from Portus, which were one component of a broader referral arrangement disclosed to Manulife clients.

According to the settlement agreement, Manulife reps referred their clients to several different series of principal-protected investment products promoted by Portus, resulting in approximately $246 million in sales.

Under its referral agreement with Portus, Manulife’s compensation was composed of referral fees of 4%–5% (depending on the series) of the total amount invested by clients; trailer fees of 1% of the total assets invested by clients; and 25%–50% of the performance fees (depending on the series) earned by Portus, which were payable each calendar quarter during which a client’s investment in Portus securities was maintained.

All of those fees were disclosed to clients. The MFDA highlights that what was not disclosed were the syndication fees of 0.5% of the total amount invested by clients of the Manulife dealership in each series of Portus securities. In not disclosing these fees, the MFDA says, Manulife behaved contrary to MFDA Rules 2.4.2(b)(iv) and 2.1.1(c).

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BCSC fines Ontario firm for not registering

(December 23, 2008) An Ontario investment firm is the latest out-of province player to be fined by the BCSC for conducting business in British Columbia without being properly registered.

Cluster Asset Management Inc., which is registered to sell securities in Ontario, and its president, Peter Michael de Auer, admitted in a settlement agreement with the BCSC that the firm provided investment advice to two B.C.-based clients without registration under the Securities Act from July 2003 to April 2008.

Cluster and Michael de Auer agreed to pay a $10,000 fine. This is in addition to paying $8,750 for registration fees that would have been payable to the BCSC if the firm had been registered in the first place.

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Horizons BetaPro splits, consolidates more ETFs

BetaPro Management has announced Tuesday it intends to split or consolidate units of exchange-traded funds in its product lineup.

Units of the Horizons BetaPro NYMEX(R) Crude Oil Bear Plus ETF (symbol: HOD) will be split at a 2:1 ratio. Once the TSX has closed for trading on December 31, 2008, the units of the ETF will be split and will begin trading on a split adjusted basis on January 2, 2009. The split will become effective on January 6, 2009, for unitholders of record on that day.

The Horizons BetaPro NYMEX(R) Crude Oil Bull Plus ETF (symbol: HOU) and the Horizons BetaPro S&P/TSX(R) Global Gold Bear Plus (symbol: HGD) will each be consolidated at a 1:5 ratio.

The consolidation will take place on December 31, 2008, and the ETFs will begin trading on a consolidated basis on January 2, 2009.

(12/23/08)