CALGARY, May 24, 2018 /CNW/ - The Alberta Securities Commission (ASC) has concluded a Settlement Agreement with Nancy Louise Bland in which she admits to having authorized, permitted or acquiesced in the preparation of financial disclosure by The Cash Store Financial Services Inc. (Cash Store) that violated the Securities Act (Alberta).
Bland acted as Chief Financial Officer of Cash Store until June 2012. Cash Store was an Alberta corporation that operated in the payday lending industry. Its shares traded on the Toronto Stock Exchange and the New York Stock Exchange until the spring of 2014, when it applied for creditor protection.
Cash Store's second quarter (Q2) 2012 Financial Statements included disclosure about a significant asset acquisition. Cash Store had purchased loans it had itself brokered between retail borrowers and a group of lenders Cash Store relied on for capital. Restated Q2 Financial Statements that Cash Store filed in December 2012 dramatically lowered the value of the acquired loan portfolio and related intangible assets. In its restatements, Cash Store expensed a significant "premium paid to acquire the portfolio of loans" and disclosed that the premium "settled pre-existing relationships" with the lenders. The restated Q2 2012 Financial Statements disclosed that the restatements were necessary because of accounting errors Cash Store had made.
The restated Q2 Financial Statements also increased the provision Cash Store had made for anticipated losses on its loan portfolio. Cash Store disclosed that the provision for loan losses had been understated as a result of an accounting error.
In the Settlement Agreement, Bland admits that the valuation for the acquired loans and the loan loss provision in the Q2 2012 Financial Statements were based on judgments and estimates formulated by Cash Store management that were not in accordance with the generally accepted accounting principles that governed the Q2 Financial Statements (US GAAP), and therefore represented a contravention of section 146 of the Securities Act and section 3.7 of National Instrument 52-107 by Cash Store. Bland further admits that she authorized, permitted or acquiesced in these contraventions.
As part of the Settlement Agreement, Bland paid $50,000 to the ASC and agreed to resign all positions she may have as an officer or director of any reporting issuers and to refrain from becoming an officer or director of any such issuer for a period of two years.
The ASC is the regulatory agency responsible for administering the province's securities laws. It is entrusted with fostering a fair and efficient capital market in Alberta and with protecting investors. As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada's capital markets.
SOURCE Alberta Securities Commission
For further information: For Media Inquiries: Hilary McMeekin, Manager, Communications, 403.592.8186; For Investor Inquiries: ASC Public Inquiries, Toll Free 1.877.355.4488