OSC issues cease trade order against Juniper funds

The Ontario Securities Commission issued a cease trade order last week against the Juniper Equity Growth and the Juniper Income funds.

A hearing has been scheduled before the Commission on Thursday, March 23, 2006 to determine whether the temporary order should be extended.

The OSC says its staff has been conducting a compliance review into Juniper’s role as manager for the funds and their compliance with Ontario securities law. In a temporary order issued last week, the Commission says it has identified “apparent deficiencies with the Funds’ accounting, governance practices and records.”

The two funds in question include assets from Capstone funds that were merged with the Juniper funds back in November 2005. The Capstone Balanced, Canadian Equity and Global Equity funds, managed by Toronto-based, Morgan Meighen & Associates, merged with the Juniper Equity Growth Fund in October. It also took over management of the Capstone Cash Management Fund, renaming it the Juniper Income Fund. With shareholder approval the company changed the fund’s investment objectives, strategies and increased management fees.

At the same time, the company also took over as the fund’s registrar and transfer agent, hired Concentra Trust and NBCN Clearing to replace the Royal Trust Company as trustee and custodian, and changed auditors, naming Henderson Partners LLP to replace Price Waterhouse Coopers.

The company retained Morgan Meighen as a portfolio advisor and established an investment committee in November. The committee, chaired by Juniper’s president, Roy Brown, includes representatives from Juniper, Morgan Meighen and Leon Frazer & Associates. The company dropped Scarthingmoor Asset Management as the fund’s sub-advisor.

Late in 2004, Juniper made similar changes to the Equity Growth Fund, taking over transfer agent, record keeping and fund accounting responsibilities from CIBC Mellon Trust Company while appointing Concentra and NBCN to replace CIBC as trustee and custodian.

Filed by Kate McCaffery Advisor.ca, kate.mccaffery@advisor.rogers.com