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(May 1, 2007) The British Columbia Securities Commission has found a B.C. trio guilty of operating a phone room that conducted cold calls using high-pressure sales tactics to sell securities. Not only was the operation not registered with the BCSC but one of the key individuals in the scheme was already under a ten-year ban from trading securities in the province.

The BCSC says that, in 2002, Francis (Frank) Jason Dean Biller was recruited by Richard Jeffs to relocate to Vancouver to help run a phone room operated by Bayshore Management Corporation, a company for which his brother, Leigh Jeffs, was a director. Leigh Jeffs was also the director and president of Fairtide Capital Corporation and sole director and president of Gibraltor Consulting Corporation.

From June 2002 to November 2002, Biller supervised approximately 16 callers in the phone room, training them to deal with objections from call recipients and writing scripts for them to read. Bayshore’s callers made thousands of calls to people living both inside and outside of B.C., violating the Securities Act by repeatedly calling people and pressuring them to purchase the investments they were promoting. Callers also contravened the Act by trading in the securities they promoted, the BCSC says.

In November 2002, BCSC staff executed a search and shut the room down.

The BCSC has imposed a lifetime ban on Biller from acting as a director or officer of any issuer in British Columbia, engaging in investor relations activities and purchasing or trading securities in the province. The BCSC also stated that Biller should be fined $250,000, but because he is already $30 million in debt, it ruled he has no prospects of ever paying the money back.

In two other settlements, Richard Jeffs is banned from investor relations activities in B.C. for a period of five years.

His brother, Leigh Jeffs, has agreed to pay $75,000 to the BCSC, and he is to remove Fairtide and Bayshore from the B.C. corporate registry. In addition, he is banned from being a director or officer of a public issuer, or engaging in investor relations for 15 years.

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Hartford adds low-load option to funds

(May 1, 2007) Hartford Investments Canada has launched two new low-load classes for all Hartford Mutual Funds.

The first low-load option, Class L1, provides a 1% upfront commission and 1% annual trailing commission to advisors on equity and balanced mandates. It also has a deferred sales charge schedule of two years.

The second low-load option, Class L3, provides a 3% upfront commission with a 0.50% trailing commission in years one, two and three on equity and balanced mandates. This trailer increases to 1% in year four and has a deferred sales charge period of three years.

Hartford also points out that there will be a reduced MER for both Class L1 and Class L3 on equity and balanced mandates compared to Hartford Canada’s Class B units. A 10% free redemption entitlement is also available on all funds.

“This launch is another move by Hartford Canada to give advisors what they need to be competitive in the marketplace. As investors want more flexibility from their mutual funds, advisors need more choice to meet those needs,” said Laurie Davis, president of Hartford Canada. “Our new low-load classes are a win-win for everyone: investors get more choice in terms of duration while advisors gain two additional commission structures.”

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RBC launches new series of commodity PPNs

(May 1, 2007) RBC has issued the RBC Commodity Booster Notes, Series 2, a principal protected five-year note that invests in a basket of commodities.

The note offers 100% principal protection and gives investors exposure to a basket of commodities which includes Brent crude oil, copper, nickel and zinc. The notes also have what RBC calls “a booster zone.” This feature guarantees a return of 55% at maturity if the note grows more than 0% and less than 55%.

RBC highlights that the notes are issued in Canadian dollars and there is no direct foreign currency exposure. They can be purchased through FundSERV (code RBC322) and are available to investors and advisors until May 25, 2007. The maturity date is May 31, 2012.

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B2B offers prime-rate on May investment loans

(May 1, 2007) B2B Trust is offering prime rate on investment loans under $50,000 from May 1 through May 31, 2007.

B2B says the promotion is targeted at advisors whose clients have a higher risk tolerance and are seeking to increase their market exposure through mutual or seg fund investments. The special rate for qualifying loans booked in May is for the life of the loan, as long as the original terms remain the same and the loan is in good standing.

B2B is also launching new features to its Investment Loan Program. These include a streamlined 100% investment loan product with a new 40% total debt service ratio guideline, simplified documentation requirements and more eligible funds to invest in.

“We are committed to maintaining B2B Trust’s premier position in the industry and to strengthening our reputation for excellence,” says François Desjardins, CEO of B2B Trust. “We are confident that pairing this special rate with the overall program enhancements, in this key post-RRSP selling season, is another proof of B2B Trust’s understanding of our clients and their business priorities.”

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(05/01/07)