TSX Symbol: CIX
TORONTO, Feb. 10, 2016 /CNW/ - CI Financial Corp. ("CI")
issued the following statement with regard to the no-contest
settlement agreement entered into today between its subsidiary CI
Investments Inc. and the Ontario Securities Commission (the
"Settlement Agreement").
CI Financial will release its audited financial results later
today which include a provision of $10.75
million for remediation of the administrative error which is
the subject of the Settlement Agreement. This amount includes the
cost of the voluntary payment which CI Investments has agreed to
make to the Ontario Securities Commission.
The Settlement Agreement is in respect of an administrative
error that CI Investments discovered in April 2015 and reported to the Ontario Securities
Commission. As a result of this error, approximately $156.1 million of interest that had accrued in
the bank accounts of seven CI Investments mutual funds had not been
properly recorded as an asset in the accounting records of those
funds. As a result, the NAVs of these funds, and any funds that had
invested in these funds, had been understated for several years.
The accumulated interest is in bank accounts owned by the mutual
funds and at all times remained in those bank accounts as an asset
of these funds and was never co-mingled with the property of CI
Investments.
Once the error was discovered, CI Investments, with the
assistance of an independent consulting firm, undertook a
comprehensive investigation into how the error occurred and
developed a plan to put affected investors into the economic
position they would have been in if the interest had been
recorded. The remediation plan will return the entire amount
of the accumulated interest to current and former investors in the
funds without deduction of any management fees or administrative
costs. Over 48% of retail investors in the affected mutual funds
will receive payments of $100 or
less.
CI Investments has already undertaken enhancements to its
systems and processes to help prevent similar errors from occurring
in the future.
CI Financial Corp. (TSX: CIX) is an independent, Canadian-owned
wealth management company. CI offers a broad range of investment
products and services, including an industry-leading selection of
investment funds, and is on the Web at www.cifinancial.com.
This press release contains forward-looking statements with
respect to CI and its products and services, including its business
operations and strategy and financial performance and condition.
Although management believes that the expectations reflected in
such forward-looking statements are reasonable, such statements
involve risks and uncertainties. Actual results may differ
materially from those expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ
materially from expectations include, among other things, general
economic and market factors, including interest rates, business
competition, changes in government regulations or in tax laws, and
other factors discussed in materials filed with applicable
securities regulatory authorities from time to time.
SOURCE CI Financial Corp.