OSC Approves No-Contest Settlement Agreement with Manulife Securities Incorporated and Manulife Securities Investment Services Inc.

TORONTO – The Ontario Securities Commission (OSC) today approved a no-contest settlement agreement with Manulife Securities Incorporated and Manulife Securities Investment Services Inc. (the Manulife Dealers) in relation to a matter that the Manulife Dealers discovered and self-reported to the OSC.

This settlement follows allegations by OSC Staff that there were inadequacies in the Manulife Dealers’ systems of controls and supervision, which resulted in certain clients paying, directly or indirectly, excess fees that were not detected or corrected in a timely manner. OSC Staff do not allege, and have found no evidence of dishonest conduct by the Manulife Dealers.

While having neither admitted nor denied the accuracy of the facts and conclusions of OSC Staff, the Manulife Dealers have agreed to the settlement, and intend to compensate clients a total of $11,700,000 including opportunity costs on fees.

“Regular vigilance is required to safeguard client accounts from errors and inattention,” said Jeff Kehoe, Director of Enforcement at the OSC. “Clients have the right to expect robust compliance systems and controls to protect against excess fees.”

In addition to the compensation to investors, the Manulife Dealers have made a payment of $495,000 to advance the OSC’s mandate of protecting investors, plus a further payment of $25,000 to be allocated toward the costs of OSC Staff’s investigation.

After reporting this matter, the Manulife Dealers provided prompt, detailed and candid co-operation to OSC Staff. The Manulife Dealers have also implemented additional controls and supervision to prevent a re-occurrence of this matter.

To date, the OSC has approved nine no-contest settlements, resulting in approximately $354 million in compensation to investors.

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets and confidence in the capital markets. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at www.osc.ca

 

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