OSC fast-tracks penalties against financial firm

(January 25, 2005) Wells Fargo Financial Canada has been hit with penalties and fines totalling $25,000 by the Ontario Securities Commission under a new simplified disciplinary process.

The firm — whose main business is raising capital for the consumer finance sector — breached Ontario securities law through a series of late filings of medium-term notes, the OSC says.

Proceedings against Wells Fargo were launched last month and completed yesterday, the result of a new system that permits OSC staff to prioritize, or fast-track, cases that do not require extensive investigation.

“Staff wish to emphasize that the intent of the simplified process initiative is not intended to compromise in any way the rights and protections to which any respondent in an OSC proceeding is entitled,” says OSC litigator Greg MacKenzie. “While the simplified process aims to bring certain matters to a hearing quickly, once the hearing commences we are in the hands of the commission and it is expected that all the normal rules, procedures and protections afforded to respondents continue to apply.”

The commission and other Canadian regulators have faced criticism in the past for the slow pace of their investigative procedures.

Wells Fargo has been ordered to pay an administrative penalty of $20,000 to the commission and $5,000 toward the costs of the investigation.

OSC vice-chair Paul Moore noted this was the first application of an administrative penalty by the commission under expanded sanctioning powers granted to the commission in 2003. He added that the commission intends to “vigorously enforce late filings.”

“The warning signal has been given,” he added. “Let the street take note.”

In a separate hearing yesterday also involving Wells Fargo, the firm’s auditor, William Andrew Campbell, was found to have issued auditor reports for six publicly-traded companies while not registered with the Canadian Public Accountability Board. Campbell was reprimanded by the commission and ordered to disgorge $10,000 in audit fees to the OSC.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com