Canadian investment bank Canaccord Genuity Group Inc. said it faces an investigation related to its wholesale market-making activities and may have to pay a “significant penalty” to settle it.
(Bloomberg) — Canadian investment bank Canaccord Genuity Group Inc. said it faces an investigation related to its wholesale market-making activities and may have to pay a “significant penalty” to settle it.
The firm made the disclosure in a regulatory filing with Canadian authorities late Wednesday. It didn’t say which jurisdiction is conducting the probe.
Previously, Canaccord had said it was dealing with a regulatory matter in one of its foreign divisions, without giving details on the nature of the investigation.
Canaccord’s capital markets division operates in the US, Canada, Australia, the UK and Europe, with a focus on serving small- and mid-cap companies in several sectors including technology, mining and cannabis. The US is the largest segment, generating about 60% of the unit’s C$793 million ($598 million) in revenue for the fiscal year that ended March 31.
Canaccord “expects that the resolution of the enforcement matter will not have a material impact on its financial condition or results of operations,” the company said, but it “may incur a significant penalty and additional costs.” Canaccord added C$13.4 million to its provision for legal cases in the most recent fiscal year, according to its annual report.
Canaccord shares were up 0.5% to C$8.21 on Thursday morning. A spokesperson for the firm didn’t return messages.
A group of executives led by Chief Executive Officer Dan Daviau and Chairman David Kassie tried to take the company private this year in a deal that valued it at about C$1.1 billion. But the bid expired on June 13 when they determined they couldn’t get timely approval from regulators.
Read More: Canaccord LBO Plan Falls Apart as Regulatory Probe Drags On
In a separate filing, Canaccord said Kassie plans to step down from an executive management role after the company’s shareholder meeting on Aug. 4, and from the chairman’s position after the meeting in 2024.
(Updates with share price in sixth paragraph)
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