Defunct payday lender Cash Store accused of disclosure violations

The Alberta Securities Commission is accusing defunct payday lender Cash Store Financial Services Inc. and two of its executives of failing to file proper financial statements.

The regulator says the Edmonton-based company, which once operated more than 500 Cash Store or Instaloans outlets, failed to disclose obligations it owed to certain lenders in its 2011 annual and 2012 interim financial statements, and made false or misleading statements by saying that certain loans were not guaranteed.

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It says Cash Store also failed to disclose an appropriate value for loans it purchased from these lenders in its interim 2012 financial reports.

The ASC also alleges that former CEO Gordon Reykdal authorized or permitted violations to occur, and that he and former chief financial officer Nancy Bland authorized or permitted the violation relating to the loan valuation to occur.

The allegations have not been proven. An appearance to set a date for a hearing is to be held in March.

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Cash Store shares were delisted from the Toronto Stock Exchange and the company filed for court protection from creditors in 2014. In 2016, it paid $10 million to settle a class-action lawsuit brought on behalf of borrowers who paid higher loan fees than were allowed.