Canada's Capital Markets Tribunal ruled that Emerge Canada Inc. mismanaged Toronto-listed exchange-traded funds linked to Cathie Wood, finding the firm took self-dealing loans totaling C$6 million ($4.2 million) over three years. The amount represented 6.1% of the funds' net asset value by the end of the period. Former CEO Lisa Lake Langley and CFO Desmond Alvares breached their duties as directors and officers.
The tribunal found the firm diverted funds to prop up its businesses while maintaining improper records. Emerge managed about C$118 million across 11 funds before they were ordered to stop trading in April 2023, marking the first time Ontario's OSC halted an entire suite of funds. The decision highlights failures in compliance and governance, though the Independent Review Committee members were cleared of blame.
Lawyers for IRC members Bruce Friesen, Marie Rounding, and Monique Hutchins welcomed the exoneration, stating the panel rejected broader responsibilities for the committee. Penalties and costs will be determined at a later hearing.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing