December 01, 2005
The Saskatchewan Financial Services Commission will preside over a
precedent-setting hearing Dec. 8 as lawyers for Wade MacBain and two other
officials of the former Matrix Financial Corp. argue the commission should shut
down a disciplinary hearing launched by the Investment Dealers Association of
MacBain, a former financial planner, is being investigated by the IDA
over whether he convinced some former clients to make investments that were
inappropriate for their risk profile. The clients are also pursuing him in a
MacBain is alleged to have convinced clients to invest heavily in
Saskatchewan Wheat Pool stock after the former co-op grain company turned itself
into a public company in the late 1990s.
When Pool shares tanked a few years after the company's initial public
offering, many of MacBain's clients, including farmers and farm widows, claim
their retirement savings were nearly wiped out.
In the past year, lawyers for MacBain and former Matrix officials Edward
Neufeld and Fred Smith have argued the IDA lacks jurisdiction in the case.
Neufeld was a former compliance officer for Matrix while Smith is named because
he was the "ultimate designated person" at Matrix.
Dean Murrison, of the legal section of the securities division within the
Saskatchewan Financial Services Commission, says other provincial commissions,
such as the Ontario Securities Commission (OSC), have been involved in IDA
cases. However, this is a first for the Saskatchewan commission.
"It has happened in other provinces. The OSC hears appeals from the IDA
all the time at various stages," Murrison said. "So the whole thing is new for
the commission here even though it's a power that's been around forever."
The commission is seeking outside counsel to advise commission members as
the IDA and lawyers for MacBain, Neufeld and Smith make their arguments,
Murrison said. The Dec. 8 hearing in Regina is open to the public.
Warren Funt, the IDA's vice-president of member regulation for Western
Canada, says the IDA has never heard the main body of evidence against MacBain
and the former Matrix officials because of the many procedural appeals of its
process. The IDA first met on the case a year ago in Saskatoon, where MacBain's
lawyer immediately began challenging the IDA's jurisdiction.