By Staff | May 16, 2007 | Last updated on May 16, 2007
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(May 16, 2007) A Vancouver broker has admitted to contravening Investment Dealers Association of Canada bylaws and violating the B.C. Securities Act by helping a prohibited individual execute trades in a third person’s account.

Between April 2000 and September 2004, Edward Bernard Johnson, who worked for IDA member Golden Capital Securities Ltd. allowed Stanley Steven Ross to trade in an account of a third party without proper authorization. Ross instructed Johnson in connection with about 400 of the 450 trades in the account. Johnson executed the trades, even though he did not have the account holder’s authority to do so.

The BCSC says that Johnson’s conduct already warranted penalties from the IDA, but to make matters worse, at the time of the trades, Ross was under an order prohibiting him from trading securities. BCSC staff charged that Johnson knew of the order against Ross, but the hearing panel ruled that there was insufficient evidence to prove this.

At the hearing, Johnson did admit he was aware that Ross was trading in the account. During interviews in 2004 and 2005, Johnson denied this. Misleading commission investigators is in contravention of the Securities Act.

In a separate settlement with the BCSC, Ross agreed to a further seven-year ban and a $50,000 fine. Penalties against Johnson are pending.

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HSBC offers emerging market fund

(May 16, 2007) HSBC Investment Funds has launched the HSBC BRIC Equity Fund, which invests in emerging market economies of Brazil, Russia, India and China (BRIC). HSBC says the four economies now account for approximately 11% of world GDP.

“High-growth emerging markets offer exciting investment possibilities,” says Marc Cevey, CEO of HSBC Investment Funds (Canada). “However, the challenge for the average investor in these very diverse and dynamic markets is to consistently find the most promising opportunities.”

HSBC says it will find these opportunities by capitalizing on market inefficiencies using proprietary quantitative valuation models. Risk management and cost control are central to the strategy.

The fund is designed to be a long-term investment and high-growth option within a well-diversified portfolio. The minimum investment is $500.

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Trade requires Canada to heed U.S.: study

(May 16, 2007) A study by the Fraser Institute argues that Canada needs to accommodate United States security concerns if it wants to improve economic relations with its largest trade partner.

The report, Canadian-American Relations in 2007, looks at the recent history of Canada and U.S. relations and trade disputes. It concludes that changes in governments on both sides of the border are an opportunity to better relations. The study’s author, Dr. Alexander Moens, would like to see Canada specifically focus on reaching an agreement with the U.S. on shared border security and defence.

“Recent trade disputes such as softwood lumber and the so-called mad cow disease were allowed to fester and drag on primarily because Canada had no political capital with the White House that it could call on to help defuse the disputes,” says Moens, who is also a senior fellow with the Fraser Institute.

Moens highlights that while trade is the single largest Canadian interest in its relationship with the United States, events since September 11, 2001, show the United States considers a stable security relationship of greater importance. When these interests are not being met by its trade partners, the free flow of trade may be endangered.

Canada has an enormous stake in the free flow of trade with the U.S., Moens says. In 2005, 78% of Canadian exports went to the U.S. and 65% of its imports came from there. The total value of trade with the U.S. was $709 billion — about 51.8% of Canada’s GDP in 2005.

“Rather than approach each trade-related issue on a piecemeal basis, our government should be working with the U.S. to reach a comprehensive agreement on security measures and a shared border to ensure we have continued access to the U.S. market,” Moen says.

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(05/16/07) staff


The staff of have been covering news for financial advisors since 1998.