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Home Capital was trading near $6 again Thursday after credit-rating agency DBRS downgraded the company and placed its various securities and investment offerings under review. There were no underlying reasons for the DBRS downgrade, except that the OSC had triggered an investor and depositor run on the company. The agency warned that the company, stripped of its top executives, might not be able to find new ones. It also might not be able to find new equity or keep depositors.

The sole cause of this investment wipe out is the OSC, whose mandate is to protect investors.

As previously noted, the OSC last month called for dismissal of top executives on the grounds that Home Capital had failed to disclose relatively minor problems with a small number of its mortgage brokers back in 2014. The broker issue, ancient history to the market, turns on what will be the prime sticking point in OSC hearings: Has the commission turned what are largely minor and legally subjective management decisions about shareholder disclosure into a major corporate scandal that has wiped billions of dollars off the value of Home Capital and other financial institutions, large and small?

Short sellers spew bull about Home Capital, hurting the investors the OSC claims to protect

Whether OSFI — the federal Office of the Superintendent of Financial Institutions — is happy or not, it won’t say. In answer to a series of questions I sent to OSFI this week, the agency said it is “prevented by law” from confirming whether or not Ontario securities commissioners asked OSFI for advice before moving on Home Capital. As to whether OSFI approved or consented to the OSC action, the federal agency responded that “OSFI has no role in such decisions.” Is that a clue?