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(June 26, 2007) Scotiabank announced Tuesday the signing of a definitive agreement to acquire TradeFreedom Securities, a privately owned Canadian online brokerage boutique. Terms of the transaction were not disclosed.

Scotiabank says TradeFreedom, which was founded in 1999, is geared toward active traders and investors, and provides a bundle of services, including instant trading and confirmations with direct access to exchanges, electronic communication networks and free streaming real-time data.

The platform offers access to U.S. and Canadian equity, options, futures and foreign exchange trading as well as pre-market and after-hours trading.

Chris Hodgson, executive vice-president and head of Scotiabank’s domestic personal banking, says that Scotiabank intends to offer TradeFreedom alongside its own discount brokerage, ScotiaMcLeod Direct Investing.

“This transaction is an excellent strategic fit for both organizations, and we look forward to providing a seamless transition to the customers and employees of TradeFreedom,” Hodgson says. “Scotiabank anticipates no interruption in TradeFreedom’s business. The bank will maintain TradeFreedom’s brand and leverage both platforms’ competitive range of online brokerage products and high-quality customer service.”

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BCSC imposes maximum penalty on fraudster

(June 26, 2007) A White Rock, B.C., man has been permanently banned from trading securities by the British Columbia Securities Commission and fined $250,000 for defrauding clients of more than $14 million.

On April 25, 2007, a commission panel ruled that Brian David Anderson perpetrated fraud, made misrepresentations and distributed securities illegally while promoting two investments.

Anderson created and promoted Frontier Assets and the Alpha Program, both of which were found to be fraudulent by the panel. He raised approximately $14.7 million from 352 investors, 57 of whom were residents of B.C. The BCSC says there is no evidence to suggest the investors will get their money back.

The panel ordered Anderson permanently banned from trading securities, holding a position as a director or officer of any issuer, and engaging in investor relations. Anderson was also ordered to pay $250,000, the maximum administrative penalty available under the Act at the time of his misconduct.

In a letter to the BCSC, Anderson, who is currently residing in a New York prison, says he cannot pay the fine. The BCSC doesn’t dispute this but says the fine is necessary to serve as a general deterrent to “similar wrongdoing.”

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Canada’s corporate tax rate among highest in world

(June 26, 2007) Canada stands out as having one of the highest corporate tax rates in the world, a KPMG study reports.

Canada’s corporate tax rate of 36.1% is the third highest among developed economies. It ranks behind only Japan, which has the highest corporate tax rate at 40.7%, and the United States, at 40%.

In the study of 92 countries, KPMG says that regionally the EU had the lowest corporate tax rates at 24.2%, compared with 27.8% in the OECD countries.

Lower corporate tax doesn’t translate into lower taxes overall. The survey also found that indirect taxes in Europe are the highest in the world. Value Added Tax (VAT) or Goods and Services Tax (GST) rates in the EU countries average 19.5%, compared with 17.7% in the OECD.

Canada is below those rates with an average federal GST of 6% and provincial sales tax rates ranging from 6% to 10%.

“This is the first year that we have added indirect taxes to our long-running survey of international corporate tax rates,” says KPMG Canada’s national indirect tax leader, Deb Taylor.

KPMG says, globally, indirect taxes have held steady over the past six years at around 18%, while the average corporate income tax rate has fallen. As a result, indirect taxes have become more important to national governments.

KPMG suspects the reason that indirect taxes are not more prevalent is because the increase is obvious when you buy goods, making it a politically difficult solution.

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MFDA fines advisor $5,000 for shoddy compliance

(June 26, 2007) The former president of a Toronto-based investment firm has been fined $5,000 by a Mutual Fund Dealers Association hearing panel for allowing an advisor in her firm to conduct securities-related business, even though the advisor was not registered to do so by the provincial regulator.

Between 2001 and 2004, Mary Elizabeth Rygiel allowed her predecessor to advise more than 30 clients. Unfortunately, this particular advisor had relinquished his registration to trade securities in Ontario. The MFDA says Rygiel was aware of this but continued to allow him to advise clients.

In addition to the fine, the MFDA says, Rygiel is prohibited from acting in a compliance or supervisory capacity with a member firm for a period of three years. She will also be required to write the appropriate proficiency examination prior to becoming registered in any compliance or supervisory role.

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Jovian appoints interim chair

(June 26, 2007) Effective Tuesday, Donald Penny will be the interim chair of Jovian Capital Corporation’s board.

Penny, who was the chair of Jovian’s audit and risk management committee, will serve in the role until a successor is appointed. Penny replaces Thomas J. Rice, who will continue to serve as a director of Jovian.

Rice is the founder of Rice Capital Management Plus, the predecessor company of Jovian.

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(06/26/07)