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(December 24, 2007) Ian Thow, Berkshire’s former vice-president, has been fined $6 million by the British Columbia Securities Commission.

Using recent legislative amendments, the regulator was able to slap this hefty fine on Thow and also permanently ban him from participating in B.C.’s capital markets.

On October 16 of this year, Thow was found guilty of perpetuating fraud, making misrepresentations, trading in securities without being registered and “investing” millions of dollars from clients into non-existent securities.

“This case represents one of the most callous and audacious frauds this province has seen,” the BCSC panel said in its October findings.

Besides being fined and banned from trading, Thow can never be a director or officer of any issuer, registrant or investment fund manager, and he cannot engage in any investor-related activities.

“Through his serious misconduct, Thow significantly harmed investors as described in the findings and damaged the integrity of British Columbia’s capital markets,” the panel said in its decision on the sanctions. “Thow’s conduct shows he is not fit to participate in our capital markets. We must also make orders that will demonstrate the consequences of his conduct and that will have an appropriate deterrent effect.”

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MX increases ownership in Boston Options Exchange

(December 24, 2007) The Montreal Exchange, which recently announced that it was merging with the TSX, has increased its ownership in the Boston Options Exchange.

If regulatory approval is granted, the exchange will own 53.2% of BOX, up from 31.4%. The Montreal Exchange will cough up $52.5 million in cash for the deal.

“This strategic investment will extend the footprint of the Montreal Exchange in the North American equity options market,” said Luc Bertrand, president and CEO of MX. “The agreement with our longstanding U.S. partner, the BSE, confirms our key role as technical operator and trading technology developer for this innovative U.S. options market.”

Besides MX, BOX’s other partners are Citadel, Citigroup, Credit Suisse First Boston, IB Exchange Corporation, JP Morgan, Morgan Stanley and UBS.

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Unity Life takes another step toward demutualization

(December 24, 2007) Unity Life took another step toward demutualization by mailing information packages to about 15,000 eligible policyholders.

If the demutualization goes through, policyholders will be forced to give up their voting control and Unity Life shares in exchange for cash payments.

The company says insurance coverage and policy values won’t be affected.

This follows the August 9 announcement that Foresters, the company sponsoring the demutualization, will buy Unity Life.

The package includes voting information and details surrounding the cash payment.

“We urge all of our eligible policyholders to vote on this important proposal,” says Anthony Poole, president and CEO of Unity Life. “The information package is designed to ensure that policyholders have all the information they require in order to make an informed decision about sponsored demutualization. At least two-thirds of those who vote must be in favour of the proposal for it to proceed. The board of directors of Unity Life has recommended this proposal, but ultimately, the policyholders must decide.”

Policyholders can vote by proxy or in person on February 28 at 10:00 a.m. at the Mississauga Convention Centre.

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Agreement made over ABCP restructuring

(December 24, 2007) Over the weekend, the Pan-Canadian Investors Committee for Third-Party Structured Asset Backed Commercial Paper said that it has come to an agreement in principal regarding comprehensive restructuring of ABCP issued by 20 trusts covered by the Montreal Accord.

“I am pleased that we were able to build on the momentum achieved leading up to our December 14 announcement, and that the parties came to a consensus on a plan which I believe will allow note holders to increase long-term value and significantly decrease risk of the outstanding ABCP, all well ahead of the new January 31, 2008, deadline,” said Purdy Crawford, chairman of the investors committee.

He adds that he’s confident the plan will allow shareholders of outstanding commercial paper to have the opportunity to get a full repayment of principal by holding restructured notes to maturity.

Crawford says that there may be some diminution from the original ABCP par value, but, thanks to the restructuring, the majority of the ABCP should give investors a “reasonable expectation” of getting the full par value overtime and “substantially reduces the risk that external events affecting credit markets in general will have an adverse impact on the restructured notes.”

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Geoffrey Allen Wall fined $20,000 by IDA

(December 24, 2007) Geoffrey Allen Wall can forget using his Christmas bonus on presents this year — this season he’ll be paying his $20,000 fine from the IDA.

The Vancouver-based dealer, who worked at Wolverton Securities was fined for personally compensating a client for transactions that were executed on behalf of investment accounts for which Wall was the registered representative. He didn’t get consent for these actions, which took place from April 2003 to October 2005.

The fine could have been worse, but the hearing panel recognized that Wall fully cooperated with IDA staff and has no prior disciplinary record.

As well as the fine, Wall has to rewrite and pass an exam based on the Conduct and Practices Handbook before he can be eligible for registration again. He’ll also be monitored closely for 12 months after registering.

(12/24/07)