Ontario’s securities regulator has approved a settlement deal with Home Capital Group Inc. and several former company executives in the wake of the disclosure scandal that rocked the alternative lender.
An Ontario Securities Commission panel gave the nod to the settlement at a hearing Wednesday morning in Toronto.
The agreement, which was reached in mid-June, sees Home Capital Group pay $10 million to settle with the OSC and reimburse the watchdog costs of $500,000.
In addition, Home Capital founder Gerald Soloway was hit with pay an administrative penalty of $1 million. He is barred from acting as a director or officer of a public company for four years.
Former CFO Robert Morton and former CEO Martin Reid were assessed administrative penalties of $500,000. They are also prohibited from acting as a director or officer of a public company for two years.
The penalties assessed against Home Capital and the former executives has already been paid. About $11 million of the penalties is to be distributed to Home Capital shareholders who are covered by a related class action suit that’s awaiting court approval.
The OSC settlement is conditional on the Ontario Superior Court accepting a settlement worth about $29.5 million including the money collected through the OSC process.
The settlement closes the book on allegations that the company and the executives misled investors by not immediately disclosing information it uncovered about falsified loan applications for around $30 million.
Since the issue hit the headlines, Home Capital has named a new chief executive and made several changes to its board of directors.