Briefly: “IIROC suspends Credifinance membership” and more news

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The Investment Industry Regulatory Organization of Canada has suspended the membership of Credifinance Securities Limited, following a March 6 hearing.

Under the suspension, Credifinance must immediately cease dealing with the public, and must comply with IIROC Rule 600, which covers suspended members. The regulatory body has also ordered Credifinance to pay staff costs associated with this application, in the amount of $6,000.

In December 2008, IIROC gave notice that it would commence a hearing on June 15, 2009, into allegations against the firm and three of its staff.

In the December notice, it was alleged that two of the firm’s registered reps, Georges Benarroch and Linda Kent, “failed to properly perform their gatekeeper responsibilities in connection with trading in Credifinance client accounts.” That charge stems from the allegation that the pair engaged in improper financial and business transactions with Credifinance clients in relation to the distribution and sale of shares in Magnum D’Or Resources and Osprey Gold.

Benarroch also faces disciplinary action for allegedly providing untrue or misleading evidence to staff of the IDA between September 2005 and April 2007.

IIROC also alleged that chief compliance officer Marjorie Ann Glover failed to exercise due diligence and failed to adequately supervise the conduct of Benarroch and Kent.

The firm itself is alleged to have failed in its role as gatekeeper by not providing adequate supervision of Benarroch and Kent.

In January, Credifinance Securities informed IIROC that it intended to resign its membership.

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Sun Life adopts “say on pay” policy

Sun Life Financial has joined a growing list of companies within the financial services sector which have adopted “say on pay” policies. The company will introduce a non-binding shareholder vote on executive compensation at its annual meeting to be held in 2010.

On Tuesday, the TMX Group announced that it would adopt similar measures at its 2010 meeting. In February, RBC and CIBC announced they would give shareholders a say on executive compensation.

Read: Banks agree to shareholder proposals on executive pay

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Tax refunds earmarked for debts

The household balance sheet is bound to improve for many Canadians, as 43% are planning to devote their tax refunds to debt reduction, according to a survey released by Dr Tax Software, maker of UFile tax software.

Reducing debt is by far the most popular plan, as investing for retirement ranked second with only 9%.

The survey also found that 28% felt they do not have an adequate plan in place to deal with their personal finances in the worsening economy.

“Canadians clearly want to reduce their debt load and view their tax refunds as an important opportunity to do this, but many lack an effective strategy to help to maximize their refunds,” says Malcolm Campbell, vice-president and general manager of Dr Tax.

Unfortunately, 53% said they had no plans to be any more disciplined about filing their taxes than they had been in the past.

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Tax plan would stifle real estate market: study

A proposed plan to harmonize Ontario’s provincial sales tax with the GST would deal yet another blow to the residential construction industry, according to a report by the Building Industry and Land Development Association (BILD).

A study conducted by independent real estate consulting and advisory firm Altus Group found that tax increases on new, single detached homes could range from $8,957 in Windsor, to as high as $46,676 in Toronto.

“All told, harmonization of PST and GST without any offsetting measures by the provincial government would rip $2.4 billon dollars out of the pockets of new homebuyers, slamming the homeownership door shut in the face of many Ontarians,” said Stephen Dupuis, president and CEO of BILD.

He says builders are not fighting harmonization, but want “fair treatment of housing under a harmonized sales tax regime.”

“The reason housing gets hit so hard is that it is the biggest of the big-ticket items and it’s not currently directly subject to PST, for good reason,” he said.

(03/11/09)