Briefly:

(June 17, 2005) The British Columbia Securities Commission has ruled that an English stock promoter violated provincial securities laws by trading on inside information and manipulating the market.

Fatir Hussain Siddiqi of London traded in shares of AIS Resources while he had inside information about AIS and manipulated the market in the company’s stock, the regulator says.

The BCSC says Siddiqi also made undeclared short sales of AIS stock, distributed shares of AIS from a control position without giving the required notice, and acquired a controlling interest in AIS without filing the required news release.

The violations occurred in 2000, when Siddiqi came to Canada to help public companies raise capital. The BCSC says it will review submissions from all parties before making a decision on sanctions.

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Name change for Jovian investment dealer subsidiary

(June 17, 2005) McFarlane Gordon, the investment dealer arm of Jovian Capital, is changing its name to MGI Securities.

The firm was founded in 2000 by Don McFarlane and Crawford Gordon and has experienced substantial growth. Business lines now include institutional sales, trading and research, underwriting, syndication, merger and acquisition advice, and fixed income trading and syndication.

MGI’s staff has grown from six to more than 80, with offices in Montreal, Toronto, London, Ontario, Winnipeg and Calgary.

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Wise Riddell to join PerformINS MGA network

(June 17, 2005) PerformINS Canada today announced plans to purchase Wise Riddell Financial Group, which will become part of PerformINS’s growing network of managing general agencies.

Wise Riddell, formed 16 years ago, offers advice, products, services, and support to independent insurance and financial advisors who serve the needs of high net worth clients, as well as to selected national financial planning firms.

Formed in 2004, PerformINS’s strategic plan is to consolidate approximately 10 MGAs across Canada over the next three years. Wise Riddell is the third MGA to join the network.

“Wise Riddell Financial Group is well known in the MGA community and has a fine reputation for working in the affluent and advanced markets. Their expertise and commitment to excellence can only help strengthen our organization,” says Bruce Hammond, CEO of PerformINS Canada.

“We looked at what was best for the advisors we support and our organization,” says David Stewart, managing partner at Wise Riddell. “The PerformINS offering allows us to do what we do best: support our advisors through case consultation and education.”

“With volume requirements increasing and margins shrinking, we see a huge value in the back-office platform this transaction will create,” Stewart added. “This system will upgrade our third party administration offering to our national account partners as well.

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Manulife trimming dividend scale

(June 17, 2005) Manulife Financial is reducing its Canadian policyholder dividend scale, beginning August 1.

In a statement on Friday, the insurance giant said the cuts were modest — ranging from zero to 0.75% for most policies — but necessary to maintain long-term viability in an era of low interest rates.

“Policy-owners of participating policies understand that dividends are not guaranteed and actual dividends depend on investment performance and other factors, such as mortality, persistency and expenses,” Manulife added.

Manulife also announced today it is distributing approximately $200 million to participating Canadian policyholders this year, up 5% from 2004.

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Winnipeg rep hit with lifetime ban by IDA

(June 17, 2005) The IDA has issued a lifetime ban against a former Winnipeg credit union employee for misappropriating funds from both clients and her employer. Irene Judt was also fined $7,500 and ordered to pay costs of $5,000.

Judt worked at the Winnipeg office of Carpathia Credit Union as an investment advisor, and its affiliated IDA member firm, Credential Securities, as a mutual fund sales rep.

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Former BMO Nesbitt Burns rep fined $125,000

(June 16, 2005) The IDA has banned former BMO Nesbitt Burns representative John Deans for life, fined him $125,000, ordered him to disgorge nearly $42,000 in commissions and pay $15,000 in costs.

An IDA hearing panel found that between 1998 and 2001, Deans made 157 trades without the client’s knowledge or consent. He also falsely declared that a number of trades had been initiated by the client and misled a client by issuing false portfolio statements.

Deans was fired by BMO in 2002. Although the IDA attempts to collect all outstanding fines, it does not have the legal power to do so from reps who are no longer working in the brokerage industry.

In a separate decision released today, the IDA fined Moncton-based rep Doreen Dempsey $35,000 for recommending transactions without ensuring they were suitable for clients.

Dempsey, who worked for Merrill Lynch at the time of the complaints, was also ordered to pay $5,000 in costs, will be subject to close supervision for one year and is required to re-write and pass the Conduct & Practices Handbook course.

She continues to work in the Moncton office of CIBC World Markets, which took over Merrill Lynch in 2001.

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IPC hooks up with web software firm

(June 16, 2005) Investment Planning Counsel has hired iLinc to provide web conference and training software for its advisors.

iLinc’s products include live online training sessions, online advisor-to-advisor meetings, live online presentations and remote technical support.

“iLinc saves advisors time and money by eliminating both the travel and associated expenses incurred when attending training sessions and meetings,” IPC said today in a release.

“Our more than 550 advisors are the cornerstone of our business, and we’re committed to giving them the knowledge and tools they need to help investors achieve their financial goals,” adds IPC president Chris Reynolds.

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Canadians buy up U.S. bonds

(June 16, 2005) Canadian investors purchased $2.7 billion worth of foreign securities in April, mostly U.S. bonds, Statistics Canada reports. About three-quarters of the total investment, or $2.2 billion, went into U.S. bonds, mainly treasury issues, the agency said in its monthly report on international securities transactions.

Canadian investors also purchased $634 million in foreign stocks in April. The bulk of those investments went into overseas equities.

Meanwhile, foreign investment in Canadian securities was “nominal” in April, StatsCan — just $230 million, a sharp decline from $2 billion in March and the smallest amount since August, 2004.

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Canadian trade with China rapidly expanding

(June 16, 2005) Canada exported more than $6.6 billion in merchandise to China last year, making the country our second largest trading partner, behind the U.S.

Canadian imports from China also grew in 2004, to more than $24 billion. Since 1990, Canada’s imports from China have risen at an annual average rate of nearly 23%, while export growth has averaged 12.5%, Statistics Canada said in a report released today.

China trailed only the U.S. as a source of our imports last year, bumping Japan and Mexico to third and fourth place, respectively.

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Police charge two in Nigerian letter scam

(June 16, 2005) Toronto-area police have made two arrests in a Nigerian letter scam in which an elderly victim lost more than $200,000.

Peel regional police say the victim was contacted regarding a possible inheritance from Nigeria and over a period of eight months, paid out more than $200,000 US in an effort to receive the inheritance.

Police made the arrests when the victim was lured to Toronto this week to meet with the fraudsters.

Maclarine Mbong Kwo of Toronto is charged with fraud, conspiracy to commit fraud and uttering a forged document. Daniel Oti of Brampton faces similar charges.

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Assante streamlines back office

(June 15, 2005) Assante is moving to a common administrative platform for Assante Wealth Management, Assante Private Counsel and IQON Financial, using the resources of parent company CI Fund Management.

That means IQON’s back-office and corporate functions in Winnipeg will be moved to Ontario.

Despite the integration, Assante president Joe Canavan insists all three divisions will be maintained and supported, and their “unique value proposition” will be clearly defined.

“We are very excited about our plans for the future of all three businesses and the excellent opportunities each presents,” said Canavan. “We have significantly restructured and refined our distribution platform since Assante was acquired by CI and are now positioned for significant growth. We will grow our business three ways [and] we are fully committed to supporting our advisors achieve their goals and objectives.”

Canavan says Assante has recently started a recruitment program and is looking at “selective acquisitions.”

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CPPIB makes real estate investment

(June 15, 2005) The CPP Investment Board is spending $1 billion to acquire a 50% ownership stake in Oxford Properties, owner of 11 large commercial real estate properties across the country.

Oxford has 8.2 million square feet of commercial office space in downtown locations in Calgary, Edmonton, Montreal, Ottawa, Toronto and Vancouver.

“This transaction significantly advances our plan to diversify the CPP reserve fund into high quality real estate and other real return assets. This is an exceptional opportunity that fits very well with our long-term investment objectives,” said David Denison, President and CEO, CPP Investment Board.

“Real estate offers attractive risk-adjusted returns that are a good match for the inflation-indexed benefits provided by the CPP, ” he added.

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Canada third in CSR reporting, says KPMG

(June 15, 2005) Canada’s ranks third in the world in terms of corporate social responsibility reporting, according to KPMG’s annual CSR reporting survey.

KPMG surveyed the 100 largest companies in 16 countries. In Canada, 41% of firms issue corporate social responsibility reports. Japan was first, at 80%, followed by Britain at 71%.

“This increase in corporate responsibility reporting in Canada over the last three years is clearly a response to the emphasis being placed on issues such the environment, economics and risk management,” says KPMG’s Wayne Chodzicki.

As a whole, 52% of the 250 largest companies in the world now issue CSR reports, up nine percentage points from 2002.

The most notable increase was in the financial sector, “reflecting growing attention in this sector to corporate responsibility issues such as ethics, values and codes of conduct, in a time when social issues can no longer be regarded as disconnected from business drivers,” said KPMG managing director Mike Alexander.

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Ontario insurance regulator recognizes same-sex relationships

(June 15, 2005) The Financial Services Commission of Ontario has changed the province’s Pension Benefits Act, amending the definition of spouses to include same-sex relationships. The move was effective June 13, FSCO said in a notice posted on its website.

The adjustment will affect a number of FSCO pension forms, including applications for registration of a pension plan and applications to withdraw funds from a locked-in account.

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CIBC names new director

(June 15, 2005) CIBC has appointed Brent Belzberg to the bank’s board of directors. Belzberg founded Torquest Partners, a Canadian-based manager of private equity funds in 2002 and has more than 20 years of experience in executive management and financial services.

Originally trained as a lawyer, Belzberg currently serves as a director of O&Y REIT and Four Seasons Hotels.

He is also a director of Toronto’s Mount Sinai Hospital, Canadian Council for Israel and Jewish Advocacy and Toronto Community Foundation, and serves as an advisor to several faculties at the University of Toronto.

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Crocus could face RCMP probe

(June 14, 2005) Manitoba’s Crocus Investment Fund — which announced Monday it would not be returning to the market — could be the subject of an RCMP investigation.

An independent prosecutor from the Ontario Ministry of the Attorney General has completed a review of the Manitoba auditor general’s report on the troubled labour fund and recommended the matter be referred to the police for a criminal investigation, the Manitoba government said today in a release.

The review was conducted by W. Graeme Cameron, deputy director of Ontario’s crown law office. “On his advice, both the full report and concerns raised by Stuart Murray during the course of a media interview will be forwarded to the RCMP for their investigation,” the release said.

On Monday, the Crocus board said it had engaged Deloitte and Touche, LLP to help with the process of determining how to get the best deal for Crocus’s shareholders. Several companies have expressed interest in purchasing the company or ownership in the firm’s various portfolio businesses, Crocus said.

In a release, the board said it expects the auditor will initiate the process as soon as possible, with the aim of making a recommendation to shareholders by early fall.

The board also warned shareholders that the liquidation process is complicated and the realized value of the business will only be known once the process is complete. At the same time it said that the latest estimated price of approximately $7 per share “is not certain at this time.”

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RCMP charges Betacom executives

(June 14, 2005) The RCMP’s Greater Toronto Area Integrated Market Enforcement (GTA IMET) team of investigators, lawyers and forensic accountants, has charged three senior corporate executives of the former Betacom Corporation with accounting fraud.

The investigation began in March 2004 after the company was referred to IMET by the Ontario Securities Commission.

Police say the company overstated revenues during successive quarters in 2002 and 2003, ranging from $700,000 to $2.3 million in audited and unaudited financial statements. Police also say the company reported false sales of approximately $1.1 million, failed to disclose a $300,000 loan to the company and did not report the interest payments the company was making on the loan in their audited financial statements for the year.

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AGF names VP for institutional sales

(June 13, 2005) AGF Funds has appointed Gary Wing to the newly-created post of senior vice president, institutional investment services.

“AGF is committed to strengthening this important dimension of our business and we are ensuring that we have the right people and strategies to accomplish that goal,” said Randy Ambrosie, executive vice president, sales and marketing at AGF. “Gary brings a wealth of experience and relationships on the institutional side that will reinforce our approach in this key area.”

Wing comes to AGF from Franklin Templeton Investments, where he held a similar post.

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CoVirt signs up Equinox

(June 13, 2005) Internet-based life insurance administrator CoVirt has announced that Equinox Financial Group has chosen VirtGate to replace its current agency management systems for all Equinox marketing centres.

Tim Traill, director of e-business at Equinox, says his firm reviewed all agency management systems on the market and came up with a short list of five companies.

“CoVirt’s VirtGate received 45 out of a total of 50 possible votes from this group,” he says.

“VirtGate is the most advanced and complete platform to meet the specific needs of the Canadian life insurance industry, yet it’s easy to use,” adds Equinox general manager Daniel Dessureault.

“Having the Equinox network of marketing centres join the rapidly increasing VirtGate family is yet another milestone for CoVirt,” says CoVirt president Tim Fitzpatrick.

“The Equinox distribution network is one of the top life insurance distribution alliances in Canada and so a collective decision to select VirtGate by so many well established and respected managing general agencies speaks volumes. Once the participating Equinox marketing centres are converted by September, we will have approximately 55 VirtGate production sites.”

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Mackenzie unveils new Keystone portfolio

(June 13, 2005) Mackenzie Financial and M.R.S. have added a new conservative portfolio to the Keystone family, the Keystone Diversified Income Portfolio Fund. There are now six different portfolios under the Keystone brand.

“More and more investors are seeking safety in their portfolio, although research shows they may be overdoing it,” said Eric Grove, vice president, managed assets, MRS. “Many investors opt for income-oriented portfolios which may prove too conservative in nature and which may not provide the long-term growth needed to fund their lifestyles well into retirement.”

The new fund will invest in a variety of income-generating assets, including fixed income, income trusts and equity investments. It is classed as Canadian balanced equity.

In a separate move, Mackenzie and MRS also finalized a new fund alliance with Goodman & Company, Investment Counsel, advisor to Dynamic Mutual Funds, for the Keystone Dynamic Power Small-Cap Capital Class. Rohit Sehgal will lead the fund with Alexander Lane.

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Manulife Mutual Funds to terminate three funds

(June 13, 2005) Manulife Mutual Funds is terminating the MIX AIM American Mid-Cap Growth Class and MIX Global Sector Class, effective September 30, 2005. The firm is also closing the Elliott & Page Asian Growth Fund, effective December 15, 2005.

The assets under management for the funds ranges from $4.9 million and about $10 million. The firm said the decision was based on the cost associated with operating such small funds.

“Through regular review of our fund line-up, we are able to ensure that Manulife Mutual Funds offers a strong and efficient product offering that meets the demands of investors and their advisors,” said Rick Annaert, vice president of investment products for Manulife Financial.

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MFDA fines, bans Ontario man

(June 13, 2005) A hearing panel of the MFDA has found Anthony McPhail of Ontario in breach of rules of conduct, having failed to provide requested documents related to an investigation and failing to show up at the regulator’s office when requested.

McPhail has been fined $50,000, as well as ordered to pay costs of $10,000. He has also been permanently banned from conducting “certain securities related business,” which the MFDA promises to elaborate on at a later date.

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OpenSky launches series 5 MBI notes

(June 13, 2005) OpenSky Capital has launched series 5 of its MBI Balanced Portfolio notes, with principal protection provided by National Bank of Canada. The notes carry no upside limit and are linked to the performance of a portfolio of funds managed by Montrusco Bolton.

Returns of the underlying portfolio for the first two series of notes based on the same program were 18.1% and 12.6% per annum respectively as of April 30, 2005.

Series 5 notes are available until July 22, 2005, and provide an up-front commission of 4% and a trailer of 0.25%. The underlying investment portfolio is considered suitable for “investors seeking the attractive return of a balanced portfolio without risking their principal.”

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Founder leaves Real Assets

(June 13, 2005) Real Assets Investment Management has announced the departure of founder and president, Deb Abbey.

Abbey is the author of Global Profit and Global Justice and also co-authored The 50 Best Ethical Stocks for Canadians (with Michael Jantzi). She plans to write another book in the fall.

“Deb’s vision and voice for socially responsible investing has put Real Assets in an enviable position of leadership as we move into the next stage of our evolution,” said Kerry Ho, CEO of Real Assets. “She has left the company in the hands of a strong, multi-disciplinary management team.”

Ho says the company plans to introduce new funds in the fall. Vancity is said to be increasing its ownership in Real Assets.

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