Here are the top reads on deals and financial services over the last 24 hours,
Investors call for restitution from regulator over Fortress investment: A group of investors says Ontario’s mortgage regulator bears some of the blame for losses linked to investments in Fortress Real Developments Inc. and is calling on the provincial government to pay restitution. Story (Janet McFarland, for subscribers)
Regulators leave Fortress investors exposed to mortgage industry Wild West: Jawad Rathore, chief executive officer and majority owner of troubled Fortress Real Developments, has a history of run-ins with regulators dating back to the early 2000s. Different regulators, that is. In 2005, the Mutual Fund Dealers Association of Canada banished him for life from the mutual fund industry. Six years later, the Ontario Securities Commission banned him from trading in securities or giving securities advice for 15 years. But Mr. Rathore never really got out of the business of selling investments. He didn’t have to. Fortress, based in Richmond Hill, Ont., would go on to sell nearly $1-billion worth of risky syndicated commercial real estate mortgages to thousands of often unsophisticated small investors between 2008 and 2017, according to a sweeping investigation of Fortress by reporter Janet McFarland in Saturday’s Globe and Mail. Opinion (Barrie McKenna, for subscibers)
Shopify’s equity deal sparks 19.5 per cent plummet in shares: Software firm Shopify Inc. added US$440-million to its war chest last week with a stock offering that it said would improve its balance sheet and help pay for future growth plans. That decision has proved to be a headache for its shareholders and the investment banks that led the deal. Story (Andrew Willis, for subscribers)
Michelle Romanow’s Clearbanc raises another $50-million when published: Dragons' Den star Michele Romanow and her partner Andrew D’Souza have secured another US$50-million to grow their latest startup, Clearbanc, just weeks after announcing they had raised US$70-million to bankroll the financing provider for e-commerce firms. Story (Sean Silcoff)
Three recipients of Ottawa’s venture capital program hit halfway mark on funds: Three of the five fund-of-funds managers that were chosen by the federal government to stimulate Canada’s venture-capital industry have surpassed half of their fundraising targets. Story (Sean Silcoff, for subscribers)
OSC says Glencore unit made misleading statements, hid relationship with Israeli businessman: The Ontario Securities Commission alleges that Katanga Mining Ltd, and a number of its current and past officers and directors, broke Canadian securities laws by making misleading financial statements and failed to disclose a relationship with a controversial Israeli businessman who provided services to the company. The regulator is holding a hearing on Tuesday to approve a settlement agreement that is expected to lead to millions of dollars in fines for Katanga, a Toronto-listed subsidiary of Glencore PLC, a giant Anglo-Swiss metals and mining conglomerate. Story (Niall McGee, for subscribers)
Do banks’ new small-business lending platforms deliver on their promise? We applied for loans to find out: Small-business owners have long complained about the difficulty of getting bank loans. The process has often been slow and bureaucratic, and many small companies, particularly those without hard assets, say rejections for funding have been all too common. But in recent months, some banks – nudged by upstart competitors in the fintech space – have unveiled new platforms to serve small business. They claim to make it easier for these customers to access money, but do they live up to their promise? We figured the best way to gauge was to apply for loans on the platforms. Story (Sarah Efron, for subscribers)
MORE FINANCIAL SERVICES NEWS
Charges: Malaysia on Monday filed criminal charges against Goldman Sachs and two of the U.S. bank’s former employees in connection with an investigation into suspected corruption and money laundering at state fund 1MDB. Story (for subscribers)
MORE DEALS NEWS
Asset swap: Alimentation Couche-Tard Inc. and CrossAmerica Partners LP have signed a deal to swap convenience and gas station assets in the United States. Story (for subscribers)
Utilities: TransCanada Corp. has signed a deal to sell its Coolidge Generating Station in Arizona to a subsidiary of Southwest Generation Operating Co. LLC for $623 million. Story (for subscribers)
Antitrust concerns: Siemens and Alstom have offered to sell either one of their high-speed train technologies to address EU antitrust concerns about their plan to create a Franco-German rail champion, people familiar with the matter said on Monday. Story (for subscribers)
IN CASE YOU MISSED IT
Inside the fall of Fortress: At its peak, Fortress was Canada’s largest syndicated mortgage company. It also led the transformation of what had once been a high-risk investment vehicle for wealthy investors into a mainstream one sold to ordinary Canadians. And as more people handed over their life savings to Fortress and other syndicated mortgage firms – many of which adopted Fortress’s retail-investor focus – the provincial mortgage regulator, the Financial Services Commission of Ontario (FSCO), did little to protect them. Investigation (Janet McFarland, for subscribers)
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