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(March 13, 2007) A Canadian study conducted by Info-Tech Research Group, on behalf of Symantec Corp., reveals that only 10% of executives believe Canadian businesses are fully prepared to conform to Bill 198’s compliance legislation.

Ontario’s Bill 198 and its sister legislation in other provinces, passed to create a framework equivalent to the U.S. Sarbanes-Oxley Act, have been dubbed “C-SOX.” These laws require publicly held companies to disclose their processes for testing and maintaining secure internal financial systems before implementing their plans over the course of 2007.

The survey was conducted during the month leading up to and immediately following the Dec. 31, 2006, deadline for companies to report on investor protection processes they plan to implement in 2007.

Symantec said that despite the deadline, stiff penalties and the legislation’s intentions, more than 55% of respondents from across Canada indicated their companies were, at best, “mostly but not completely compliant.” An additional 35% indicated their companies were only partially compliant. And 63% of respondents indicated their companies spent less than half of 1% of revenue achieving C-SOX compliance, and one-fifth of those spent nothing at all.

The study finds that this apathy extends from the top down. Far from ideal, 67% of C-level respondents — CEOs, CFOs etc. — reported having a clearly defined role in supporting compliance processes, and 54% were actually unsure how their companies would meet C-SOX requirements. In addition, 45% of executives polled regarded the legislation as unnecessary.

“The results of this survey indicate that companies are not working fast enough to conform with Bill 198 despite the potential for major fines, damage to reputation and even jail terms of up to five years,” said Constantine Karbaliotis, a Canadian senior compliance business specialist with Symantec. “There also seems to exist some confusion with regards to who within an organization is responsible for compliance.

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B.C. trader admits trading under ban

(March 13, 2007) The British Columbia Securities Commission has reached a settlement with a B.C. man who admitted to trading securities despite being under a seven-year trading ban.

Stanley Steven Ross is once again banned from buying or selling securities, or engaging in any investor relations activities for a further seven years.

In 1999, Ross, the sole director, officer and owner of B.C.-based Fortune Capital Management Inc., was banned from securities trading until July 19, 2006, due to previous violations of BCSC rules.

Ross wasn’t idle for long. He admitted to the BCSC that between 2000 and 2004, he traded in securities while unregistered and without exemptions when he bought and sold securities in his name and that of Fortune Capital Management Inc. at a securities dealer in Ontario and in an account held by a third party in B.C.

During this period, his trading activity included 551 trades in which he bought and sold more than 650,000 shares of a company listed on the U.S. Over-the-Counter Bulletin Board. Ross made some of those trades through the third-party account.

In addition to being sentenced to another seven-year trading ban, Ross agreed to pay $50,000 to the BCSC.

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RBC Dain Rauscher acquires J.B. Hanauer

(March 13, 2007) RBC Dain Rauscher, Inc., a subsidiary of RBC Financial, announced Tuesday that it is acquiring New Jersey-based J.B. Hanauer & Co., a privately held, employee-owned financial services firm.

RBC said that J.B. Hanauer specializes in retail fixed-income and wealth-management services. It runs five offices in three states with slightly more than 300 employees and close to $10 billion in assets under administration.

“J.B. Hanauer represents a strong strategic and cultural fit for our firm, significantly expanding our presence in New Jersey, Florida and Pennsylvania — all important markets for us,” said John Taft, CEO of RBC Dain Rauscher.

The details of the transaction were not disclosed, but RBC said the transaction is expected to be completed in May 2007.

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State Street launches fixed-income strategy for Canada

(March 13, 2007) State Street Global Advisors has announced the launch of its Active Canadian Fixed Income strategy, which will attempt to be a risk-controlled approach for core fixed-income investors seeking to deliver consistent risk-adjusted returns.

State Street said the strategy is designed to add steady returns over the Scotia Capital Universe Bond Index by taking active positions across multiple and diverse strategies that aim to generate excess annualized returns of 50 to 75 basis points over a rolling four-year period.

The strategy will be managed by a team of professionals with an average of 15 years’ experience, State Street said. The team will also have at its disposal a range of credit analysts that monitor different sectors within the fixed-income market.

“Our dynamic portfolio management process combines fundamental, quantitative and technical analysis to capitalize on true market inefficiencies,” said Carl Bang, senior managing director of State Street Global Advisors. “This integrated approach, combined with the depth of our credit research team, sets us apart as a leader in providing core fixed-income products to the Canadian institutional marketplace.”

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Private equity watchdog releases new valuation guidelines

(March 13, 2007) The Private Equity Industry Guidelines Group, a volunteer group of industry-wide representatives concerned with increased transparency in private equity, has updated its U.S. Private Equity Valuation Guidelines.

The group said the updated guidelines will attempt to assist private equity participants in complying with the U.S. Generally Accepted Accounting Principles, which require fair-value reporting.

The guidelines are designed to promote best practices and to improve the consistency and relevancy of valuation information reported to investors — an objective that is of increasing importance to the private equity industry as a whole.

PEIGG said the new guidelines are conceptually in harmony with the International Private Equity and Venture Capital Valuation Guidelines issued in late 2005. PEIGG believes that managers who follow the guidelines will be compliant with GAAP.

“Private equity investments by their nature are difficult to monitor,” said PEIGG member Kevin Delbridge of HarbourVest, a private equity fund of fund managers. “To evaluate manager performance on an interim basis, to make manager selections and to make asset allocation decisions, we need results reported on a common basis. Fair value as outlined in the guidelines provides that consistent basis.”

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(03/13/07)