TORONTO – Millions of dollars worth of cheques will be soon be mailed to eligible investors who bought asset-backed commercial paper through certain Canadian investment firms shortly before the market for the securities collapsed in 2007.
According to the regulators overseeing the process, cheques worth a total of nearly $60 million plus accrued interest will be sent to eligible investors who bought the investments.
Asset-backed commercial paper, or ABCP, was seen as a conservative short-term investment until mid-2007 when about $32 billion of asset-backed commercial paper became frozen.
The problems arose amid fears that some of the paper was backed by U.S. sub-prime mortgages, at a time when defaults on that type of debt began to soar.
The cheques are from a settlement process overseen by the Ontario Securities Association and the Investment Industry Regulatory Organization of Canada.
They announced Thursday that Ernst & Young, which was appointed to administer the distributions, began sending out notifications this week.
The money comes from five Canadian financial institutions that reached settlements in 2009 with the two financial market regulators.
Scotia Capital (TSX:BNS) agreed to pay $28.95 million, CIBC (TSX:CM) paid $21.8 million, HSBC Canada agreed to $5.93 million, Canaccord Financial Ltd. (TSX:CF) $3.1 million and Credential Securities Inc. $200,000.