TORONTO — Investment dealers under the Power Group of Companies have agreed to pay approximately $11 million to clients to compensate for excess fees as part of a settlement with the Ontario Securities Commission.
The OSC on Thursday approved the no-contest settlement agreement with IPC Securities Corporation and IPC Investment Corporation, which also included a $460,000 payment to the regulator and a further $30,000 to cover the cost of an investigation.
The settlement follows allegations by staff of the Ontario regulator of inadequacies in the dealers’ systems of controls and supervision, which resulted in certain clients paying excess fees that were not detected or corrected in a timely manner.
Both dealers are subsidiaries of the Investment Planning Counsel, which is a subsidiary of Power Corp.
The regulator said that the IPC dealers neither admitted nor denied the accuracy of the facts and conclusions of OSC staff.
The OSC added that it does not allege and has not found evidence of dishonest conduct by either IPC dealers, but the parties have agreed to compensate affected clients nearly $11 million in respect of the control and supervision inadequacies.
“Registrants are expected to have appropriate controls and supervision in place to protect against excess fees,” said Jeff Kehoe, the OSC’s director of enforcement, in a statement on Thursday.
“Regular reviews of a company’s internal compliance systems support the integrity of our financial markets and foster investor confidence.”
The Investment Planning Counsel and Power Corp. did not immediately respond to requests for comment.
The OSC said after reporting the matter, the IPC dealers provided “prompt, detailed and candid co-operation to OSC staff.” The companies have also since taken corrective action to address these issues to prevent re-occurrence.
In addition to the compensation to clients, IPC dealers have also made a voluntary payment of $460,000 to the OSC, and made a further payment of $30,000 towards the cost of the regulator’s investigation.
To date, the OSC has approved eleven no-contest settlements, resulting in over $368 million in compensation to investors.
In December, the OSC approved a no-contest settlement agreement with Assante Capital Management Ltd and Assante Financial Management Ltd. involving similar allegations of inadequacies in its systems of control and supervision that resulted in excess fees paid by certain clients. Assante Capital and Assante Financial agreed to compensate clients more than $3.8 million and more than US$15,400.