September 10, 2009 Insurance Securities

Montréal – The Autorité des marchés financiers (AMF) has launched penal proceedings in respect of 50 charges against Saverina Cottone in the Court of Québec (Criminal and Penal Division), district of Montréal, and is seeking a prison term and fines totalling $483,500.

Saverina Cottone (also known as Savy Cottone), purporting to act as a brokerage manager at First Canadian Financial Services, is alleged to have offered investments in segregated funds and life insurance subscriptions without holding a certificate in insurance of persons issued by the AMF. As well, the defendant is alleged to have offered mutual fund units without holding a certificate in group savings plans from the AMF. The defendant therefore faces 39 charges under the Act respecting the distribution of financial products and services (Distribution Act). For each of the 39 charges, the AMF is seeking a fine of $10,000, for a total of $390,000. The fine is 20 times larger than the minimum prescribed under the Distribution Act.

Finally, the defendant is alleged to have made requests to various mutual fund organizations for sale or cash transfer transactions using phoney signatures of investors for transaction authorization, thereby violating the Securities Act. The AMF has filed 11 charges in this connection and is seeking a prison term of five years less a day for each charge. In addition, the AMF is seeking a fine of $93,500 which is the approximate amount that is alleged to have been transferred based on transaction requests made by the defendant but never authorized by investors.

In determining the amount of the fines it was seeking, the AMF took into account the objective and subjective seriousness of the offences, the harm caused to the victims, the number of victims, as well as deterrence and exemplary purposes.

The Autorité des marchés financiers (AMF) is the regulatory and oversight body for Québec's financial sector.

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