ABCP Revisited (Brokers' Report 2011)

Edited by David Di Paolo

On September 28, 2011, the Ontario Securities Commission (the "Commission") released its long awaited decision In the Matter of Coventree Inc., Geoffrey Cornish and Dean Tai. The Commission concluded that Coventree Inc. (Coventree), its President, Geoffrey Cornish, and former CEO, Dean Tai, failed to disclose material facts about the underlying weakness of the asset-backed commercial paper (ABCP) market. Specifically, the Commission found that Coventree breached subsection 75(1) (disclosure of material changes) and 75(2) (report of material changes) of the Ontario Securities Act (the Act) in respect of material changes that occurred on January 22, 2007 and by the close of business on August 1, 2007. With respect to Cornish and Tai, the Commission found that, as senior officers and directors of Coventree, they authorized, permitted or acquiesced in Coventree's contraventions of the Act and were thereby deemed also to have not complied with