AppId is over the quota
AppId is over the quota
Shares of Coventree Inc. closed with a gain of nearly 30 per cent on Tuesday after the firm said the Ontario Securities Commission is seeking $16.5 million in combined costs and penalties from both the company and its co-founders.
Coventree stock moved up 80 cents to $3.50, its first trading session on the TSX Venture Exchange since its stock was halted on Sept. 28.
The firm, which came to prominence during the so-called ABCP crisis in 2007, said late Monday that it will oppose the sanctions. A hearing is scheduled for Wednesday and Thursday.
According to the company, the OSC is seeking administrative penalties of $5 million each from Coventree as well as its co-founders Geoffrey Cornish and Dean Tai. It will also seek $1.5 million in costs incurred during the ABCP investigation.
The regulator also wants to prohibit both Tai and Cornish from turning to Coventree to help pay the penalties.
Coventree said it will oppose the penalties alongside both executives.
The $32-billion ABCP market in Canada collapsed over concerns that some of the notes were backed by U.S. subprime mortgages, which were also linked to the 2008 Wall Street financial crisis that froze credit markets around the world.
Coventree was Canada's largest arranger of third-party ABCP, a type of short-term debt that was backed by assets such as mortgages, car loans and credit card receivables.
An OSC tribunal ruled last month that Coventree had failed to issue prompt announcements on two occasions in February and August 2007 when developments warranted a public warning to investors.
Coventree said the regulator also intends to seek an order that ensures trading in any securities by the company cease until the firm is wound up.
The OSC also wants Coventree to be prohibited from becoming a registrant under securities legislation and prohibited from making use of any securities law exemptions.
Coventree said it also intends to oppose these sanctions.
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