July 15, 2010 Insurance Organization

Montréal – A number of decisions were issued recently by Jean St-Gelais, President and CEO of the Autorité des marchés financiers (AMF), for offences under An Act respecting the distribution of financial products and services (the “Act”).

The AMF imposed conditions and a total of $55,000 in penalties on several firms:

Penalty of $35,000 on H.G.D. Services financiers ?

• A penalty of $35,000 was imposed on the insurance of persons and group insurance of persons firm 159831 Canada inc., which carries on business under the name H.G.D. Services financiers. Through its responsible officer, Guy D’Arcy, this firm exerted undue pressure, made misrepresentations and used fraudulent tactics to mislead some of its clients. The AMF considers that the responsible officer no longer possesses the degree of honesty or capability required to act with care and competence and that the firm failed to comply with the Act by condoning the officer’s conduct and failing to ensure that he acted in a compliant manner. The firm also failed to comply with the Act and the regulations by allowing the officer to promise results that he was unable to deliver. Lastly, through Guy D’Arcy, the firm made misrepresentations that could have misled clients.

Penalty of $7,500 on Groupe Info Courtage inc.

• A penalty of $7,500, control and monitoring measures and a change of responsible officer were imposed on Groupe Info Courtage inc., a firm registered in insurance of persons and group insurance of persons. The firm failed to adequately supervise its representative and responsible officer to ensure that she conducted financial needs analyses for her clients and that she did not make statements to clients that were incomplete, false, deceptive or liable to mislead. The firm also failed to ensure that she act with integrity and as a conscientious adviser by, in particular, giving her clients all the information that may be necessary or useful and taking reasonable steps to advise her clients properly.

Penalty of $5,000 on Réclamations du Nord-Ouest inc.

• A penalty of $5,000 and a change of responsible officer were imposed on the claims settlement firm 2965-5099 Québec inc., which carries on business under the name Réclamations du Nord-Ouest inc. This firm knowingly failed to ensure that an employee renewed his certificate and/or had it reinstated. As a result, the firm allowed the employee to perform actions reserved for claims adjusters whereas he did not hold a valid certificate. As required by the AMF, the firm demonstrated that it had set up the required control and monitoring procedures.

Penalty of $5,000 on Services financiers Richard Langevin inc.

• A penalty of $5,000 was imposed on Services financiers Richard Langevin inc. The AMF considered that a leveraging strategy was inappropriate in light of the complainant’s investor profile and that the firm failed to give the investor the information he needed to understand the risks related to the leveraged loan. The AMF also required the firm to implement control and monitoring measures to ensure that its officers and employees comply with the Act and its regulations, in particular, communicating to consumers concerned the information needed to understand the risks related to leveraged loans.

Penalty of $2,500 on Ethicor Financial Corporation

• A penalty of $2,500 was imposed on Ethicor Financial Corporation as the result of an inspection which revealed that certain files did not contain either the client’s financial profile, investment objectives or risk tolerance level. As required by the AMF further to these findings, the firm demonstrated that it had set up the required control and monitoring procedures.

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

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