Coventree Announces Release of OSC Decision

NEX Symbol:  COF.H

TORONTO, Sept. 28, 2011 /CNW/ - Coventree Inc. (NEX: COF.H) ("Coventree" or the "Company") today announced that the Ontario Securities Commission ("OSC") has released its decision in the previously announced proceeding commenced by OSC staff against Coventree and one current and one former officer.  The decision is available on the OSC's website at www.osc.gov.on.ca.

The proceeding was commenced by a notice of hearing and related statement of allegations issued by OSC staff dated December 7, 2009 (the "Notice of Hearing").  In the Notice of Hearing, OSC staff alleged that the Company and one current officer, Geoffrey Cornish, and one former officer, Dean Tai, breached Ontario securities laws and acted in a manner that is contrary to the public interest by:

  1. failing to make full, true and plain disclosure in Coventree's IPO prospectus by not disclosing the fact that Dominion Bond Rating Service Limited ("DBRS") adopted more restrictive credit rating criteria for asset-backed commercial paper ("ABCP") in November 2006;
  2. failing to meet its continuous disclosure obligations by not disclosing that DBRS' decision in January 2007 (the "DBRS January Release") to change its credit rating methodology resulted in a material change to Coventree's business or operations;
  3. making misleading statements in April 2007 by failing to provide ABCP investors with a breakdown of the total U.S. subprime exposure in Coventree-sponsored conduits by conduit and ABCP note series; and
  4. failing to meet its continuous disclosure obligations by not disclosing liquidity and liquidity-related events and the risk of a market disruption in the days leading up to the ABCP market disruption that occurred on August 13, 2007.

The Commission dismissed the first and third allegations made by OSC staff.

With respect to the second allegation, the Commission concluded that Coventree contravened subsection 75(1) of the Securities Act (Ontario) (the "Act") by failing to forthwith issue and file a news release disclosing the material change that occurred as a result of the DBRS January Release.  The Commission also concluded that Coventree contravened subsection 75(2) of the Act by failing to file a material change report in respect of that material change.

With respect to the fourth allegation, the Commission concluded that Coventree contravened subsection 75(1) of the Act by failing to forthwith issue and file a news release disclosing the material changes that occurred by the close of business on August 1, 2007.  The Commission also concluded that Coventree contravened subsection 75(2) of the Act by failing to file a material change report in respect of those material changes.

The Commission held that there was no evidence that would lead it to conclude that either Mr. Cornish or Mr. Tai intentionally breached the Act or attempted to intentionally mislead public shareholders or investors.  However, the Commission found that each of Mr. Cornish and Mr. Tai authorized, permitted or acquiesced in the conduct referred to above and therefore are deemed to have not complied with Ontario securities law, and that such conduct was contrary to the public interest.

Coventree is continuing to review the Commission's decision with counsel and is considering its options.  Coventree will update its shareholders in due course.

This press release is intended for distribution in Canada only.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.



SOURCE Coventree Inc.

For further information:

Craig Armitage
The Equicom Group Inc.
Tel: (416) 815-0700 x278
Email: carmitage@equicomgroup.com

-or-

Ani Hotoyan-Joly
Coventree Inc.
Tel: (416) 572-2721
Email:  ani@coventree.ca

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Coventree Inc.

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