Money Home Capital Drops Most in 21 Months as Regulator Charges Firm

16:30  21 april  2017
16:30  21 april  2017 Source:   bloomberg.com

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Home Capital Group Inc., the troubled Canadian alternative-mortgage lender targeted by short-sellers, fell the most in almost two years after a financial regulator alleged that executives misled investors and broke securities laws.

But the firm also made clients pay for more than they knew about, the government charged . “This will not be an isolated case,” said Bradley Alford, chief investment officer at Alpha Capital Management. Regulators also charged that Simon Lesser, an outside accountant for the firm

 © Brett Gundlock

Home Capital Group Inc., the troubled Canadian alternative-mortgage lender targeted by short-sellers, fell the most in almost two years after a financial regulator alleged that executives misled investors and broke securities laws.

Quotes in the article

Home Capital Group Inc

HCG

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On January 1, 2013, the U.S. banking regulators ’ final rules to implement the Basel Committee on Banking Supervision’s market risk capital The table below shows the total market risk capital charge and RWAs under Basel 2.5 market risk capital framework amendment categorized by component type.

In Europe, where the regulators did not grant “ capital relief ” for double-or triple-A 20. The team at J. P. Morgan did only one more [such] deal with mortgage debt, a few months later, worth billion. 21 . “ Capital charges ” are the potential profits a bank foregoes by holding rather than.

17.71
-4.61
-20.65%
Raymond James Financial Inc

RJF

74.16
+1.34
+1.84%

Shares of the Toronto-based company dropped as much as 14 percent Thursday, the most since July 2015. The stock fell after the Ontario Securities Commission alleged Wednesday night that the company’s former officials failed to satisfy disclosure requirements, made “materially misleading statements” and failed to comply with other securities rules.

Five analysts lowered their price targets for the stock and Raymond James downgraded it to market perform from outperform. Thursday’s decline is the biggest since Home Capital Group released second-quarter results almost two years ago, when mortgage originations had fallen more than forecast and several analysts downgraded the shares. The 12-month price target of C$27.82 ($20.63) a share, the consensus of 12 analysts who watch the stock, is the lowest in at least seven years.

OSC alleges Home Capital ex-CEOs broke law

  OSC alleges Home Capital ex-CEOs broke law TORONTO - Staff with Ontario's securities regulator alleged on Wednesday that two former CEOs and the current CFO of Home Capital Group Inc. broke the law in their handling of a scandal involving falsified loan applications. HCG

That’s illegal most of the time, for obvious reasons. DiIorio found evidence that KCG had illegally The Financial Industry Regulatory Authority (Finra), a private self- regulatory organization, charged KCG on A short sale is a bet that a stock price will drop . Short sellers borrow stock shares from a broker

Read more : Home Capital rebuilding mortgage pipeline, but challenges remain. It was the firm 's decision in early months of 2015 not to publicly disclose its internal investigation and the After the Buffett news in June, the shares rose to nearly $ 21 , having quadrupled from their May low of .06.

The shares were trading at C$19.47 at 10:28 a.m. in Toronto, a 13 percent decline.

The OSC’s allegations were made against Gerald Soloway, Home Capital Group’s former chief executive and founder, former Chief Financial Officer Robert Morton and Martin Reid, the company’s longtime president who took over as CEO for less than a year before the board removed him last month.

Home Capital Group “has always carefully considered its disclosure obligations,” the company said in a statement Wednesday night. “The company believes that its disclosure satisfied applicable disclosure requirements, and the allegations are without merit. The allegations will be vigorously defended.”

Representatives for the company didn’t immediately respond to requests seeking comment Thursday.

To contact the reporter on this story: Katia Dmitrieva in Toronto at edmitrieva1@bloomberg.net.

To contact the editors responsible for this story: Daniel Taub at dtaub@bloomberg.net, Christine Maurus

©2017 Bloomberg L.P.

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