HomeTrust On Sale (Oaken Financial) | Page 14 | Oaken Financial | Discussion forum

NorthernRaven said

This is nonsense. There is nothing unclear about what the OSC was saying. They very plainly lay out what Home knew and when, from Home's own records of its internal investigations, and what Home did and didn't do. There is no question of "veracity" or "doubt" in what they lay out. The only "allegation" is that these actions and non-actions violated the disclosure regulations. That would have been a question for the OSC commissioners at the end of the proceedings, and has now been made moot by the settlement.

The question is not whether their July 2015 disclosure (where their hand was forced) was "timely" or not. If Home's knowledge of the problems in originations and verification, and the consequences it would have on their future financials, were actually "material" as defined by the regulations, then they were obliged to disclose it during their reports in February and May 2015. In this view, their actual responses about "the weather" and such to direct public questions about their originations results are quite reasonably seen as misleading.

Setting aside the likely difficulty in nailing somewhat sleazy mortgage brokers, Home found significant problems with their own underwriting employees in the matter of income verification.

If OSC should have somehow believed and acted on the assumption that going forward with their enforcement actions would cause a deposit run, then Home's management would have even more reason to. It was not a "few days", but at least a couple months, from the time the OSC delivered enforcement notices in February 2017, that Home would have realized that formal allegation proceedings were a real possibility. Probably they, no more than the OSC, thought that an actual massive deposit run was a serious possibility.

It is certainly possible to argue (certainly with hindsight) that all parties might have acted differently in various ways, but not by sweeping the actual situation under the carpet.  

Northern, you are relying on the OSC's statements as facts when they plainly are not. Could their conclusions have been misconstrued? Could there have been misinterpretation? We don't know because the company could not respond until the hearings started.

What we do know is that Home boasted a former OSC Chair on its board who actually led the investigations into the broker suspensions and who ultimately signed off on all the company's disclosures. They also have a former OSC Chair who's leading their defense. They clearly feel very strongly about their defense.

There's another story to this that we haven't heard about yet but the very actions of the OSC to broadcast these allegations damn near destroyed this company before they were even given an opportunity to respond.

There is no doubt that Home Capital (even if they weren't technically in violation of the rules) could have handled things differently . But then again, so could the OSC.

When a process that is supposed to protect investors, winds up hurting investors, something needs to be reconsidered to avoid a similar type of situation happening again at some future date.

The fact that the OSC felt the need to get Home Capital to publicly absolve them of all blame suggests to me that OSC did indeed have a negative role to play in what transpired. They just don't want to be held to account for it.

I still think an independent body needs to take a good look at what happened here, and make recommendations as to how the situation could have been better handled.

User230 said
http://www.iol.co.za/business-.....es-9806406

Here's a quote:

Allegations from the regulator in April included that Home Capital and its executives had failed to satisfy disclosure requirements, made “materially misleading statements” and failed to comply with other securities rules.

I think the OSC did their jobs in the face of a company that was not complying with rules. At some point. The OSC had to take action.  

I am pretty much on the side of OSC here too. From everything I've read, HCG played footloose and fancy free on dislosure requirements. Many of our better corporations disclose more than less to: 1) remain onside with regulators, and 2) be 'trusted' by its shareholders and clients. Transparency is key to being a good corporate citizen. When you have a CFO brag about burying the notes, the culture is wrong.

HCG had too many 'cowboys' in its executive offices (and Board too I imagine) and paid the price. Ironically, as suggested, had they come clean in 2015 and done a vigorous cleanup of their processes and quality assurrance, they would have rebounded in relatively short order.

I think they will survive this debacle OR get bought out perhaps in the $20/share range. Either way, they won't be as big a player in the future.

Good news and purchased my 5 year Gic today.

Of course I knew that it was cdic insured, but I had a lot Gic's with home trust so was dragging my feet opening a Gic with home bank, Warren Buffet gave me more confidence to get it done.