House 33, Canaccord, (CCI-T) has an interesting past going all the way back to the Winnipeg days. There have been rumors that they are a major conduit for much naked shorting in Canada on the Canadian Venture Exchange (TSX) via other brokerages/banks, but these are rumors only. Who would know and how could anyone possibly prove it given the opaque nature of the Canadian markets and the lack of a national securities regulator/watchdog. Their stock price has suffered along with all the financials, down almost $20 in the last year to $5 plus today. Their Q4 net profit margin is down 71% with return on average equity down 64%. They are under pressure. Here are a few incidents from the past.

Canaccord fined over short sales

Supervision inadequate, industry regulator rules

Jul 07, 2007 04:30 AM

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VANCOUVER–The Investment Dealers Association of Canada has fined Canaccord Capital $85,000 for failing to adequately supervise an account and not restricting an unfair strategy called "naked short selling."

The industry regulator said yesterday Canaccord failed to "establish procedures which would enable it to detect whether the trading in the account was fair to other market participants or contrary to the public interest."

Canaccord denies role in Natco shorting

2007-06-13 15:43 ET - Street Wire

Also Street Wire (U-NCII) Natco International Inc

by Mike Caswell

Canaccord Capital Corp. denies allegations it lent shares of Natco International Inc. to short sellers as the stock plunged from $3.30 to $2.25 on April 18, 2007. The brokerage says internal records show it has never lent shares of Natco and it has a policy of not lending stock in OTC Bulletin Board companies.

Last summer, Canaccord hired two JP Morgan employees as heads of fixed income operations and sales. Twelve private Advisory Teams had resigned from CANACCORD with 4 new teams being hired to “aggressively” grow assets. The firm focuses on advising small to medium-sized resource companies, which investors shunned as commodity prices and equity markets plunged in recent months.

Brokerage writedown, ABCP drive Canaccord deeper into the red

Jamie Sturgeon, Financial Post Published: Thursday, February 12, 2009

Canaccord Capital Corp. said Thursday a plunge in brokerage activity as well as losses stemming from the illiquid asset-backed commercial paper (ABCP) market drove the investment dealer deep into the red last quarter.

Vancouver-based Canaccord reported a net loss of $62.4-million ($1.27 a share) in the three-month period ended Dec. 31, compared with a profit of $15-million (31 cents) in the same period a year earlier.

Excluding one-time items, the company lost 33 cents a share. Analysts expected the company to post a loss of 23 cents a share, excluding items, according to Reuters Estimates.

Canaccord, the largest independent brokerage in Canada by assets, was forced to book a $27.5-million goodwill impairment on its capital markets services business Canaccord Adams Inc. as the unit experienced a significant decline in business.

"The rapid deterioration of business volumes driven by the worst economic environment in generations had a material and negative impact," said Paul Reynolds, chief executive of Canaccord, in a statement.

The steep drop in oil prices also forced the company to take a $4-million goodwill charge on Canaccord Enermarket Ltd., its oil and gas advisory unit.

The investment dealer also said it has moved to close a "challenging chapter" by completing the repurchase of restructured asset-back commercial paper from clients it had sold the illiquid notes to. Canaccord booked a further a pre-tax charge of $5.3-million in the quarter bringing total charges of the repurchase program, which the company said was complete Jan. 30, to $59-million.

"This challenging chapter in our history is behind us," said Mr. Reynolds.

Canaccord said it took another $6.7-million writedown in ABCP notes held in its treasury.

Staff reductions and other restructuring efforts first announced in October resulted in another $7.5-million charge.

February 12, 2009