Here are the top reads on deals and financial services over the last week. Have a great weekend.
Former RBC banker fined $100K and banned from working for U.S. banks: A U.S. regulator has fined Dirceu Magalhaes, a private-banking senior manager at an RBC office in Miami that has since been closed, alleging he illegally facilitated a series of transactions for high-risk clients in 2013. The bank dismissed him in 2013, and he is now barred from participating “in any manner” in the affairs of banks, credit unions and regulators. Story (James Bradshaw, for subscribers)
Nova Scotia becomes third province to grant investment regulator greater investigative power: Nova Scotia has become the third province to grant one of Canada’s investment regulators greater investigative power in a bid to strengthen protections for investors, including the authority to use the courts to enforce its fines against individuals found guilty of misconduct. Story (Clare O’Hara, for subscribers)
Toronto hedge fund K2 accused of ‘manipulative trading: K2 & Associates Investment Management Inc., a well-known Toronto hedge fund, has been accused of “manipulative trading” by the Ontario Securities Commission. In a statement of allegations released on Wednesday, the OSC alleged that K2, founder Shawn Kimel and president Dan Gosselin engaged “in manipulative trading activities that deceive counterparties and benefit themselves financially to the detriment of others in the marketplace.” Story (Tim Kiladze, for subscribers)
Initial public offering price below market: AltaGas Ltd.'s attempt to spin out its Canadian utility business has drummed up enough investor demand to move forward, but the initial public offering has been priced below its marketing range and the deal size will shrink. Story (Jeffrey Jones and Tim Kiladze, for subscribers)
National Bank hires David Skurka as its new head of Canadian investment banking: National Bank of Canada has hired respected Bay Street veteran David Skurka to help build up its investment bank. When Mr. Skurka joins National Bank, likely in the new year, he will be a managing director and the head of Canadian Investment Banking for the Montreal-based lender. Story (James Bradshaw, for subscribers)
MEG Energy rejects Husky’s $3.3-billion bid: MEG Energy Corp has rejected Husky Energy Inc.’s $3.3-billion unsolicited bid, saying it is worth more to investors as a stand-alone oil sands producer. “The Husky offer significantly undervalues MEG’s assets, technology, expertise and business prospects,” Chairman Jeff McCaig said in a statement. Story (Jeffrey Jones, for subscribers)
Toronto mealkit delivery startup Chefs Plate acquired by Germany’s HelloFresh: One of the world’s biggest players in the fast-growing mealkit delivery market has bought the market leader in Canada, a Toronto startup called Chefs Plate that had hoped to go public as early as this year. Germany’s HelloFresh SE announced Wednesday it has agreed to buy Chefs Plate Inc. for an undislclosed amount believed to be between $50 million and $100 million. Story (Sean Silcoff, for subscribers)
Opportunities for law firms ‘virtually limitless’ with cannabis legalization: Canada’s leading corporate law firms are embracing the opportunities posed by the legalization of recreational cannabis, a change that will affect a wide range of legal areas from tax law to privacy law, from banking to employment. Story (Sean Fine, for subscribers)
Boris Wertz’s Version One closes third fund, drawing in global investors: Vancouver-based Version One Ventures has raised its third fund, drawing $57-million from a mix of Canadian and international backers including American investment management giant Invesco Ltd. and European investment management firm Sofina SA. International investors accounted for about one-third of the fund, compared with less than 10 per cent for each of Version One’s last two funds. Story (Sean Silcoff, for subscribers)
New REIT: Just two weeks after entering the Canadian market for exchange-traded funds, leading portfolio manager Dennis Mitchell is adding to his new investment firm’s lineup with the introduction of a real estate trust for retail investors. Story (Clare O’Hara, for subscribers)
ScaleUP Ventures general partner Kent Thexton leaves to lead Sierra Wireless: Sierra Wireless Inc. chairman Kent Thexton will become the Vancouver firm’s full-time CEO, taking the helm of a global supplier of technology for the burgeoning internet-of-things market at a pivotal time for the 25-year-old company. It’s a move with broader repercussions for Canada’s teeming tech sector. Story (Sean Silcoff, for subscribers)
CIBC, RBC, Scotiabank facing fallout from debt restructuring in Barbados: A trio of Canadian banks is facing the fallout from a debt restructuring in Barbados that will slash the value of hundreds of millions of dollars worth of government paper they collectively own. Canadian Imperial Bank of Commerce, Royal Bank of Canada and Bank of Nova Scotia are the largest lenders in the Caribbean, and each has direct exposure to Barbados. Story (Tim Kiladze and James Bradshaw, for subscribers)
Second mortgage brokerage firm tied to real estate developer Fortress Real Developments shuts down: A second mortgage brokerage firm that raised money to finance projects for Fortress Real Developments Inc. has closed its doors, marking another setback for the troubled real estate developer. FDS Broker Services Inc. filed for bankruptcy effective Sept. 17, according to licensing information filed with the Financial Services Commission of Ontario, the province’s mortgage industry regulator. Story (Janet McFarland, for subscribers)
Recent oil-industry takeover bids are not a sign of renewed investor enthusiasm: An uptick in oil-patch takeover bidding has so far failed to unleash a rush of investors elbowing each other out of the way to get back into the sector. A recent series of bids, both friendly and hostile, should be drumming up all kinds of excitement as investors wager on which companies may pushed into play next. Story (Jeffrey Jones, for subscribers)
MORE FINANCIAL SERVICES AND DEALS NEWS FROM FRIDAY
Pension funds: A consortium of Canadian pension fund CPPIB and Brazil’s Votorantim Energia won a privatization auction on Friday to buy a controlling stake in power company Cesp from the government of Sao Paulo state. Story
Mining sector: Private equity firm Waterton Global Resource Management Inc. said on Friday it intends to call a special shareholder meeting of Canada’s Hudbay Minerals Inc. after the miner refused its proposal for board changes. Waterton, which said it owns about 7-per-cent stake in Hudbay, had also asked the miner in a filing on Oct. 17 to avoid any near-term acquisition or joint venture. According to media reports. Hudbay is in talks to buy Chilean miner Mantos Copper SA. Story
Lending: A financial assembly line that went haywire a decade ago and contributed to an economic crisis is gearing up again on Wall Street. Back then, one of the products the banks churned out — bondlike investments based on thousands of mortgages — proved far riskier than most had understood when it turned out that the borrowers couldn’t pay. The banking system froze, a financial panic ensued, and the country experienced its worst recession in decades. This time around, a similar kind of investment, called CLOs, is at the heart of the boom. And that’s not the only parallel: The loans are being made to risky borrowers, lending standards are dropping fast, and regulators are easing the rules. Story (for subscribers)
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