‘Several’ HCG directors served with OSC enforcement notices! The Ontario Securities Commission has issued enforcement notices to “several” current and former officers and directors of Home Capital Group Inc. Home Capital said in a statement issued late Tuesday afternoon that a statement of claim and notice of action has been filed with the Ontario Superior Court of Justice against the company and three of its officers and former officers regarding a proposed class action lawsuit for “alleged misrepresentations” in the company’s public disclosures in 2014 and 2015. Tuesday’s statement comes about a month after the OSC served an enforcement notice to Home Capital itself, saying it had reached the “preliminary conclusion” that the company had “failed to meet its continuous disclosure obligations” in 2014 and 2015.
National Bank analyst Jaeme Gloyn said in a research note last month that any financial impact from OSC sanctions are “likely manageable” based on enforcement activity by the regulator in 2014 and 2015, where total financial sanctions amounted to an average of $800,000.
However, disclosure failures have led to class-action lawsuits in the past, Gloyn told clients. For example, in July 2009, Manulife Financial Corp. was named as a defendant in a $1-billion class-action lawsuit, which was settled in January for $69-million.
“In our view, this suggests that the severity of the situation could increase materially in the event a class-action lawsuit against HCG is brought forth,” Gloyn wrote in the Feb. 12 note.
Link to the article in FP ...