Here are the top reads on deals and financial services over the last week,
Canada needs action, not more taxpayer-funded studies, to deal with money laundering: Back in 2016, when Manulife Bank paid a record $1.15-million penalty for breaking Canada’s money-laundering rules, it cut a special deal with the Financial Transactions and Reports Analysis Centre of Canada – it was allowed to keep its name a secret. That confidentiality agreement raised eyebrows, especially after the lender was outed in a media report, and its parent company downplayed the breaches as “administrative reporting violations.” Opinion (Rita Trichur)
Canadian securities regulators approve new investor protection rules but advocates want more: Canadian securities regulators have approved a set of investor protection rules that aims to hold advisers accountable for the investment decisions they make for clients, but investor advocates say the changes fall short. Story (Clare O’Hara)
U.S. regulator fines RBC Capital Markets US$5-million for failing to prevent illegal trades: A U.S. regulator has fined RBC Capital Markets LLC US$5-million for failing to prevent hundreds of “fictitious” offsetting trades even after the investment bank’s parent company, Royal Bank of Canada, was disciplined for similar infractions in 2014. Traders at RBC’s U.S. capital-markets arm believed the trades were allowed, and used them as a cheaper, less cumbersome way to move positions in futures markets between accounts within the bank. When staff asked a compliance officer whether the trades were appropriate, “the officer did not respond, follow up with the exchange, or provide any formal training until at least May, 2015,” the Commodity Futures Trading Commission (CFTC) said in its ruling. Story (James Bradshaw)
Desjardins makes changes to exec team as financial co-operative looks to expand wealth management: Desjardins Group is making changes to its executive team as the financial co-operative looks to ramp up efforts to expand its wealth management business across Canada. Denis Dubois is taking over as executive vice-president in charge of wealth management, as well as the life and health insurance businesses. Mr. Dubois moves from another key role leading the property and casualty insurance arm of Desjardins, which he had held since mid-2016. Story (James Bradshaw)
Charles Schwab’s move to axe online trading fees weighs on TD: Concerns over slowing economic growth, falling interest rates and a trade war between the United States and China have been weighing on Canadian bank stocks for more than a year. Now, investors have something else to consider: tumbling U.S. brokerage fees. Story (David Berman)
Canadian banks need to prepare for open banking now or risk being left behind: Banking services are headed toward a new horizon as emerging technologies and regulations enable better access to data. Broadly, this capability is called “open banking,” a process where bank customers can share access to their financial data with third parties in exchange for the promise of better products and services. Opinion (Robert Vokes and Andrew McFarlane)
WeWork woes, shareholder anger complicate HBC plans to privatize: As Hudson’s Bay Co.'s executive chairman seeks to privatize the retailer, his company is facing more uncertainty due to problems at one of its partners, WeWork, and further criticism from a dissident shareholder. Story (Rachelle Younglai)
WeWork pulls the plug on IPO, plans on ‘revisiting the public equity markets in the future’: WeWork’s parent The We Company said on Monday it will file to withdraw its initial public offering, a week after the SoftBank-backed office-sharing startup ousted founder Adam Neumann as its chief executive officer. Story (Reuters)
SoftBank bet billions on disruptive companies. Many have not paid off: Anyone who has taken an Uber, sent a Slack message or enjoyed a free beer at a WeWork owes a little something to Masayoshi Son. Story (The New York Times)
DEALS NEWS: MERGERS, ACQUISITIONS, IPOs and FINANCINGS
Toronto REIT hopes for $300-million IPO, capitalizing on city’s rental shortage: Another rental apartment owner is looking to go public, capitalizing on a shortage of rental units in the Greater Toronto Area and a hot market for high-yield stocks. Toronto-based Continuum Residential Real Estate Investment Trust has filed the paperwork for an initial public offering and is looking to raise $300-million, according to people familiar with the deal. Story (Tim Kiladze)
Husky to sell Prince George refinery to Tidewater Midstream for $215-million: Canadian oil and gas producer Husky Energy said on Friday it would sell its refinery in Prince George, B.C., to Tidewater Midstream and Infrastructure for $215-million in cash. Husky said in early January that it was exploring options for some of its non-core and downstream assets, including the Prince George refinery, to increase focus on its core assets in Atlantic Canada and the Asia-Pacific region. Story (Reuters)
Flutter buys PokerStars parent to create online betting giant: Gambling company The Stars Group Inc. has agreed to a US$6-billion takeover by a European competitor, the latest big deal in a consolidating sector that is looking for growth in the U.S. market. Toronto-based Stars Group, previously known as Amaya Inc., is to be acquired by Ireland’s Flutter Entertainment PLC in an all-share deal that would give Stars Group shareholders about 46 per cent of the merged entity. Its TSX-listed shares rose 31 per cent on the news to close at $26.49 apiece on the Toronto Stock Exchange. Story (Niall McGee)
Morgan Stanley, Goldman Sachs poised to lead Airbnb’s listing: report: Short-term home rental company Airbnb Inc is set to hire Morgan Stanley and Goldman Sachs Group Inc as joint lead advisers on its planned stock market flotation next year, people familiar with the matter said on Wednesday. The appointments would represent another high-profile assignment for the storied investment banks, albeit potentially less lucrative than usual. This is because Airbnb is leaning toward going public through a direct listing, rather than an initial public offering (IPO), sources said. Story (Reuters)
Caisse invests $50-million in escooter company Bird: The Caisse de dépôt et placement du Québec has invested US$50-million in electric scooter startup Bird Rides Inc., whose electric vehicles are now in more than 100 cities around the world including Calgary and Edmonton. Story (Sean Silcoff)
Canopy buys majority stake in sports drink company BioSteel: The time has come for an idea to have cannabis in sports drinks, says a former NHL player. The sports nutrition business Mike Cammalleri co-founded has been bought by a cannabis company. Canopy Growth Corporation announced Wednesday the purchase of a majority stake in BioSteel Sports Nutrition, which is now developing a line of cannabidiol (CBD) products. Story (The Canadian Press)
Building a bigger bundle: Telus acquires ADT Security’s Canadian arm for $700-million: Telus Corp. is buying one of the largest home-security businesses in the country, paying $700-million in cash for ADT Security Services Inc. as telecommunications giants race to expand their product bundles. Story (Tim Kiladze)
IN CASE YOU MISSED IT
Heavy Lifting: Seven reasons why voters should worry more about big government and red ink: Barely 3.5 per cent of Canadians named debt and deficits as the most important issue of national concern in the most recent polling done by Nanos Research. That trails the environment (21.7 per cent) and jobs/economy (18.2 per cent) by a hefty margin, and in fact, the number has never exceeded 10 per cent during the last five years of Nanos surveys. Story (Nicolas Van Praet, David Parkinson and Bill Curry)
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