May 4, 2012
Portfolio manager agrees to pay $90,000 for gross negligence
Vancouver – As part of a settlement agreement with the British Columbia Securities Commission, Genus Capital Management Inc. has agreed to pay $90,000 to the Commission for failing to file exempt distribution reports and for failing to keep updated written compliance policies and procedures in place.
The agreement states that Genus, a portfolio manager registered in British Columbia, failed to heed repeated guidance from BCSC staff concerning the regulatory implications that that would flow from revocation of a previously obtained exemption order. BCSC staff advised Genus that once that order was revoked by the Commission, Genus would be expected to file the requisite exempt distribution reports and pay the associated fees in connection with the distribution of securities of certain funds managed by Genus.
BCSC staff provided additional guidance to Genus when the order was revoked in 2009, however Genus still failed to file exempt distribution reports and pay the filing fees. It was not until after this failure was identified by BCSC staff during a routine examination of the company in 2011 that Genus filed the outstanding exempt distribution reports and paid the associated filing fees – totalling over $118,000.
In the settlement agreement, Genus acknowledged that:
- it was grossly negligent in failing to amend its policies and procedures to ensure the company met its regulatory obligations after the exemption order was revoked.
- it was grossly negligent in failing to file the requisite exempt distribution reports and pay the associated fees for a period of two years after revocation of the exemption order.
The agreement also notes that Genus has subsequently implemented changes to its practices and procedures manual to ensure future compliance with respect to the specific shortfalls identified, and has provided BCSC staff with a copy of its updated written policies and procedures manual addressing these requirements.
The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the settlement agreement on our website www.bcsc.bc.ca by typing Genus Capital Management Inc. or 2012 BCSECCOM 150 in the search box. Information regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website.
Please visit the Canadian Securities Administrators’ Disciplined Persons List for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).
For media inquiries, contact Richard Gilhooley, media relations, 604-899-6713. For public inquiries, call 604-899-6854 or 1-800-373-6393 (toll free).
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