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Ontario Securities Commission accepts 11 million Home Capital settlement

TORONTO — Ontario’s securities watchdog has approved a settlement with Home Capital Group Inc. and three former executives who have agreed they failed to tell investors quickly and completely about fraudulent activity by some mortgage brokers associated with the alternative lender.As a result of the settlement, about $11 million could flow through the Ontario Securities Commission to shareholders 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.An OSC lawyer told a hearing in Toronto that the commission needed to send a clear message that public companies are legally obligated to disclose important information within required time frames and in a form reasonable investors could use.The OSC’s announcement of its allegations in March contributed to a sudden exodus of Home Capital depositors in April that pushed the Toronto-based company to borrow about $2 billion at crushingly high interest rates in order to stay in business.Home Capital shares (TSX:HCG) and prospects have improved since famed billionaire investor Warren Buffett agreed to support the lender through an equity investment and loans by Berkshire Hathaway, his main company.

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