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by Mike Caswell
Gordon Reykdal, the chief executive officer of defunct lender Cash Store Financial Services Inc., has agreed to pay $500,000 to the Alberta Securities Commission and to serve a two-year officer and director ban over reporting failures. The ASC said that Cash Store's disclosure while he was CEO understated the financial risks associated with its lending operations. The company, which traded as high as $18.74 on the Toronto Stock Exchange in 2010, filed for bankruptcy protection in 2014 and is no longer in business.
The penalties for Mr. Reykdal are contained in a settlement agreement that the ASC released on Monday, Sept. 8. He has agreed to pay a $300,000 fine and to pay $200,000 in investigation costs. After serving his two-year ban, he must complete training in public company governance and disclosure.
The sanctions, as set out in the agreement, stem from disclosure problems in Cash Store's lending operations, starting in 2012. The company was a provider of short-term loans to consumers, with interest rates that were equivalent to an annual rate of 59 per cent. (Such loans are better known as payday loans.) As part of its business, it relied on advances from third party lenders.
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