The Member's Firm was contracted to provide Chief Financial Officer (CFO) services for a junior venture company (the "Company"). The Member was the designated person in the contract to provide those services.
Unaudited interim financial statements of the Company were filed with securities regulators. Under securities laws, the Member, as CFO, was required to make certain statutory certifications of the filings.
The staff of the British Columbia Securities Commission (BCSC) questioned the accounting method used for a significant transaction of the Company. The staff of the BCSC subsequently issued a Cease Trade Order against the Company because, in the opinion of BCSC staff, the Company had not made satisfactory statutory securities filings. The Member’s efforts to support the accounting treatment were insufficient to resolve the Cease Trade Order. The Company restated the financial statements, and the Cease Trade Order was lifted by the BCSC after the Member resigned from the Company.
During the time the Member’s Firm was contracted to provide CFO services, the Member held a share position that was not disclosed in the Company's financial statements as the CPABC Code of Professional Conduct requires. The Committee noted that the Member properly disclosed their share transactions in other public securities filings (the SEDI system).
The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows:
201.1 - Maintenance of the good reputation of the profession
202.1 - Due care
202.2 - Objectivity
The Committee recommended the Member:
- Accept a reprimand; and
- Pay expenses of $5,500.