Briefly:

(September 16, 2005) The British Columbia Securities Commission ruled Friday that a group of Bahamas-incorporated companies has been illegally selling securities to B.C. residents with the promise of 400% returns.

The group of companies violated the Securities Act by trading securities without being registered to do so and by distributing securities without filing a prospectus. The commission identified the companies as Corporate Express Inc., Corporate Express Club, and Corporate Express Club (CEC) 1998, Fortress International Ltd. and Great American Gold Ltd. Two individuals associated with the companies — John Thomas McCarthy and Cameron Willard McEwen — were also named by the commission.

According to the BCSC, McCarthy and McEwen breached temporary orders by trading in the securities of Corporate Express and Great American as well as by engaging in investor relations activities.

Over 260 people, including 117 B.C. residents bought memberships in Corporate Express for about US$40,950. Corporate Express, Fortress and Great American all illegally sold additional securities to at least 15 B.C. residents for nearly US$195,000.

The operators also violated the Securities Act by promoting the purchase of its own securities, which operated under the umbrella of the Corporate Express group, and promised returns of 50%, 175% and 400%.

The commission panel has ordered that the temporary orders remain in effect. The BCSC will decide on sanctions after it has reviewed submissions from all interested parties.

In June 2004, a B.C.-bases sales manager for Corporate Express settled with the BCSC on this matter. Patrick Thomas Stojak was banned from the capital market for three years and fined $5,000.

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IDA finds Jory Capital, execs guilty

(September 16, 2005) The IDA has found Jory Capital Inc. of Vancouver and its top executives guilty of violating by-laws, in particular its Early Warning Restrictions under By-law 30.3(iv)(3).

Patrick Michael Cooney, the CEO and a director of Jory, and Rees Merthyn Jones, Jory’s CFO were named in the finding, but penalties have not been decided.

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Standard Life consolidates its sales force

(September 16, 2005) Standard Life Assurance announced Thursday that it is consolidating its retail distribution network to strengthen its relationships with partners and within the various retail distribution networks.

The company said the new structure will offer a single point of contact for its complete suite of retail products that will target markets with consumers seeking wealth management and protection solutions.

Jordy Chilcott, vice-president of sales and retail markets at Standard Life, has been nominated to lead the new sales structure. Standard Life is building its value-added services and expects to announce more details this fall.

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Ontario makes it official: Wilson new OSC chair

(September 15, 2005) The Ontario government has formally appointed David Wilson as the new chair of the Ontario Securities Commission for a five-year term, effective November 1.

Wilson, currently CEO at Scotia Capital, was nominated by the government in June and the appointment was finalized last week by the all-party Standing Committee on Government Agencies.

“The position of OSC Chair is important in ensuring Ontario’s capital markets are strong and have the confidence of investors and publicly traded companies alike,” said Government Services Minister Gerry Phillips. “I am very pleased to have someone with Mr. Wilson’s experience and credentials taking on this key role.”

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Portus hearing delayed until December

(September 15, 2005) Investors who were hoping to get answers in the Portus Alternative Asset Management fiasco Friday will now have to wait until at least December 16th after the Ontario Securities Commission pushed back its hearing on the matter.

The OSC also extended the temporary orders preventing Portus and Boaz Manor, the hedge fund company’s founder, from redeeming assets and returning them to clients or participating in any trading activities until the hearing date. This is the third time the OSC has extending the temporary orders against the company and its founder.

The OSC did not provide any reasons for the delay. The 20-something Boaz is reportedly in Israel and claims he is too ill to cooperate with the ongoing investigation.

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Economist predicts “small correction”

(September 15, 2005) The Toronto CFA Society held its annual forecast dinner in Toronto Wednesday night, with Martin Barnes, managing editor, The Bank Credit Analysis, BCA Research, giving his macro-economic outlook with muted optimism.

After jokingly telling the thousand-plus crowd the “outlook is extremely grim,” Barnes went into his real forecast, which, while less than bullish, was certainly not grim.

Barnes stated that the effects of the housing bubble, an unbalanced world geo-political situation and a slowdown in the U.S. will be cause for a mid-cycle correction in the coming year.

He expects growth to slow to about 2.5% for two or three quarters in a row as “consumers sit on their wallets.” Not only will consumers tighten their belts, according to Barnes, but corporations will not step in to fill the gap on spending.

“You have to respect what markets are telling us,” said Barnes in reference to how stocks will fare in the next year. He said that despite a small correction, we would not enter a bear market any time soon. Overall, Barnes predicted that North America is due for a small correction but not a recession and not a major downturn in the markets.

But in true economist fashion, Barnes ended his forecast by saying he knows his predictions will be wrong and asked the question will they be wrong to the upside or to the downside? “I side on the notion that things will get better,” he concluded. (Filed by Joel Kranc, Benefits Canada)

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Gold seen hitting $500 in 2006

(September 15, 2005) The price of gold is expected to clear the $500 US hurdle next year, according to precious metal consultant GFMS. The gold market remains robust, GFMS said in a report released Wednesday, with average prices continuing to rise in the first half of the year, likely moving towards $480 by the end of 2005.

“If you’re looking at the true call on the bullion market, the figure you should focus on is jewellery demand,” said GFMS executive chair Philip Klapwijk. “And this surged by not that far off 30%.”

India was singled out as it alone accounted for around 140 tonnes of the global jewellery rise, he added.

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A logical end to Logix

(September 15, 2005) Logix Asset Management’s mutual funds are no more. Less than two-and-a-half years after their inception, the fund manager is cashing in the funds after they failed grow large enough to justify their existence.

Logix’s five funds, which combined held than $35 million in assets, will be terminated as of Nov. 14. “Although the Logix Funds have performed very much in line with their objectives, Logix Asset Management has not been able to achieve the economies of scale necessary to support the ongoing operation of the fund company infrastructure,” the company said in a release.

The wrap of up these funds follows the termination of Logix’s U.S. equity RSP fund back in July. The company’s Canadian equity fund — the company’s largest and most successful fund — never beat the S&P/TSX Composite Index. The fund holds just over $10 million in assets and has a year-to-date return of 13.53%.

All of the funds assets have been converted to cash. Unitholders will have 60 days to redeem their units without penalty. The associated investment counselling firm, Garmaise Investment Technologies, will continue to operate as a specialist in risk-controlled portfolio management and behavioural finance.

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CSA implements prospectus and registration exemption rule

(September 14, 2005) The Canadian Securities Administrators (CSA) National Instrument 45-106 goes into effect today, an effort to harmonize and consolidate prospectus and registration exemptions across Canada.

The rule attempts to combine registration exemptions in each province and territory that are largely similar, but not identical. “In addition to consolidating the various exemption regimes across Canada, NI 45-106 is more straight-forward and user-friendly,” the CSA says.

Canadian companies wanting to access the exempt market are encouraged to familiarize themselves with the new rule, the regulator adds. A list of local exemptions to the new rule was published by the CSA last week.

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BCSC issues penalty to advisor who bilked clients

(September 14, 2005) The British Columbia Securities Commission issues a $250,000 fine today against a White Rock, British Columbia advisor who stole $1.6 million of his clients’ money.

The BCSC says the “administrative penalty” is the maximum fine the commission can impose on an individual. The former Investors Group advisor, Paul Maudsley, has been banned for life from trading securities, being a director of an officer of a company, or engaging in investor relations. He must also pay nearly $60,000 to cover investigation costs.

Maudsley committed fraud when he convinced 23 clients, over the course of six years, to redeem their mutual fund holdings and invest in other securities. Rather than reinvesting the money, Maudsley took the money for his own personal use, a self-admitted substance abuse problem described by a witness as “his cocaine and gambling habit and alcohol addiction.” Maudsley was fired by Investors Group in March 2003.

His own firm, Shaylor Management, was also permanently banned and fined the maximum the commission can impose on a company: $500,000 plus hearing costs.

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S&P announces changes to market indexes

(September 14, 2005) Standard & Poors has announced a number of changes to the S&P/TSX Composite Index and the S&P/TSX Income Trust Index, as a result of its quarterly review.

The company added six new companies, primarily mid cap energy companies, and removed 14 small cap companies in different sectors, from the Composite Index. The company also added 68 new companies from a variety of sectors, to the Provisional S&P/TSX Income Trust Index. The changes take effect after the close of business on Friday, September 16.

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Institutional investors still confident: State Street

(September 14, 2005) New research from State Street Global Markets suggests that institutional investors are still confident, despite the effects of Hurricane Katrina and record high oil prices.

Overall, foreign purchase of emerging Asian and Indian equities have moderated while Indonesia and Korea are seeing outflows after several months of positive net investment. Foreign investors meanwhile are aggressively purchasing Japanese equities in numbers just short of record highs.

Although history suggests that the surge in oil prices should have a dampening effect on non-oil producing nations, State Street researchers say the global economy absorbed last year’s run-up well, adding 3.7% GDP growth in the 12 months leading up to the end of Q2 2005.

Cross-border portfolio flows remain healthy, credit spreads are tight and options volatility is low, say the authors. Although there are signs that investors risk appetites have moderated somewhat, cross-border equity flows show no signs of any broad-based capital retrenchment by institutional investors, the report says.

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AMF suspends securities advisor, freezes Zenith assets

(September 14, 2005) Quebec regulators have frozen the assets of the Zenith Stable Value Growth Fund, and suspended Denis Patry, president of Zenith Management and Research Corporation over allegations that he misappropriated funds.

The AMF and the Bureau allege that Patry misappropriated $400,000 in connection with a private distribution, misappropriated $3 million in assets belonging to clients, and issued misleading client account statements.

The AMF says although there are research expenses that are unaccounted for in the fund, “it is not known whether … embezzlement has taken place. The investigation is continuing.”

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Canaccord announces U.S. expansion

(September 13, 2005) Canaccord Capital has announced plans to purchase Adams Harkness Financial Group, a Boston-based institutional investment bank, in a cash and stock deal worth $20 million US.

“We see our expansion into the U.S. as an extension of our niche approach. Partnering with the skilled professionals at Adams Harkness creates an exciting opportunity to provide a higher level of differentiated ideas and execution to our clients,” said Paul Reynolds, vice chair and head of global capital markets at Canaccord.

Under the terms of the deal, Canaccord will pay $8 million in cash and 1.34 million in Canaccord shares, currently worth about $12 million. Canaccord says it will retain key Adams Harkness employees and ensure that senior management remain in their roles.

The new firm will be known as Canaccord Adams with the transaction expected to close on March 31, 2006.

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B.C. regulator orders new hearing for brokerage manager

(September 13, 2004) The British Columbia Securities Commission has granted an appeal by a senior manager of a Vancouver-based investment dealer regarding a decision by the IDA.

Last August, the IDA rejected a settlement agreement between John Brighten of IPO Capital and IDA enforcement staff. Brighten appealed to the BCSC for a review of the decision. The BCSC ruled that the earlier participation of one member of the IDA panel raised a “reasonable apprehension of bias,” even though there was no suggestion of actual prejudice.

“This was an error of law,” the commission panel said, “the effect of which is that the decision of the Brighten panel is void.”

The commission panel rejected Brighten’s second argument that the IDA panel had exceeded its jurisdiction and ordered that a second settlement agreement be heard before an IDA panel with new members.

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Farm advisors group to offer designation

(September 13, 2005) The Canadian Association of Farm Advisors will offer the Certified Agricultural Farm Advisor (CAFA) designation to all members, beginning at the end of September.

The association currently has chapters in Alberta, Saskatchewan, Manitoba and Ontario.

“With statistics indicating that $50 billion of net worth in farm assets will transition over the next 10 years, and that more than one-third of Canadian farmers will retire in the next 5 to 10 years, the time for a dedicated team of farm advisors has never been more important,” the association said in a release today, adding that only 5% of farmers have a written succession plan.

“While some members may have CA or LLB behind their name, the CAFA credentials indicate their proficiency in providing advice to farm- and agri-business,” says CAFA executive director Liz Robertson. “The CAFA brand helps distinguish between advisors who have made the commitment to on-going professional development specifically, on agricultural aspects.”

CAFA members in good standing will be awarded the certification on September 30 while new members after that date will need to meet additional requirements to obtain the credentials. The group hopes to sign up 2,000 advisors within five years.

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Oppenheimer hires new head of fixed income

(September 13, 2005) Oppenheimer Holdings has hired Gregory Hahn as managing director and chief investment officer of fixed Income for its asset management business. He will report to Thomas Robinson, president of Oppenheimer Asset Management.

Hahn will lead a team of portfolio managers, traders and analysts, some from 40/86 Advisors, a subsidiary of Conseco, where he was chief investment officer.

“I am pleased to welcome Greg and his team to Oppenheimer,” Robinson said. “Greg’s experience and background in fixed income portfolio management will help take our fixed income business to a new level.”

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Mackenzie, BMO team up on protected note

(September 12, 2005) Mackenzie Financial and BMO Financial have announced the launch of two new MSP ArMADA Protected Deposit Notes, available until October 28, 2005.

The seven-year note will be issued by Bank of Montreal on or about November 5, 2005, and linked to the Mackenzie Maxxum Dividend Fund.

There are two series of notes, dubbed “regular” and “ROC”. The Regular notes pay semi-annual distributions deemed to be interest income. Distributions from the MSP ArMADA Protected Deposit Notes, Maxxum Yield R.O.C. Class, Series 1 are considered return of capital. For the ROC Notes, the return, if any, payable at maturity will be, in most cases, reduced by a potential variable return reduction amount.

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AIC drops American Focused Plus performance fee

(September 12, 2005) AIC Limited has announced the elimination of its performance fee on AIC American Focused Plus Fund, alternative strategies fund available via offering memorandum.

“Today’s action highlights AIC’s commitment to delivering performance and attractive investment solutions to help Canadians achieve their financial goals,” stated Jonathan Wellum, AIC’s Chief Investment Officer. “With the elimination of its performance fee, AIC American Focused Plus Fund is better positioned to attain and maintain performance leadership.”

Since the fund’s inception in 2001 there has been a performance fee equal to 20% of the increase in the net asset value attributable to each class of units of the fund in any calendar year. Ten percent of the fee was remitted to advisors, who will continue to receive their portion of the fee, if any, up to Dec. 31, 2005.

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