Here are the top reads on deals and financial services over the last 24 hours,
How did Gerald Cotten die? A Quadriga mystery, from India to Canada and back: One day, he was on his honeymoon, enjoying the opulence of Jaipur. Twenty-four hours later, he was dead in mysterious circumstances – taking valuable secrets and cryptocurrency passwords with him to the grave. Now, his demise has left his company and industry in turmoil. This is what we know about how he lived and how his final day unfolded. Story (Nathan Vanderclippe, Jessica Leeder and Alexandra Posadzki, for subscribers)
How did QuadrigaCX work? A guide to complicated crypto trading Graphic (Murat Yukselir and Matt Lundy, for subscribers)
Aphria reveals some directors in Latin American acquisition had ‘conflicts’: Aphria Inc. says the price it paid last summer for cannabis assets in Latin America was “acceptable,” but acknowledges certain unnamed directors of the company had “conflicts” they failed to disclose. The Leamington, Ont.-based cannabis grower said Friday that a special committee had reviewed the December allegations of a pair of short-sellers, who called Aphria’s assets in Colombia, Jamaica and Argentina “largely worthless.” Aphria’s special committee said the purchase price was in line with similar acquisitions made by its competitors. Story (David Milstead, for subscribers)
Hydro One chair defends compensation plan after province rejects CEO pay proposal: Hydro One’s chairman Tom Woods is defending the company’s proposed compensation plan that has drawn the provincial government’s ire, saying a $2.475-million package is needed to attract an experienced CEO and attract a top quality management team. In a letter to Energy Minister Greg Rickford dated Thursday and posted on the company’s website Friday, Mr. Woods laid out the thinking of the board – which was appointed by the Progressive Conservative government last summer – in overshooting the government’s prescribed $1.5-million cap on CEO compensation. Story (Shawn McCarthy and Laura Stone, for subscribers)
Hydro One sets CEO compensation at $2.5-million, above level sought by province: Hydro One’s board of directors has proposed to pay a new chief executive up to $2.475-milion, a plan that is being angrily rejected by the government of Premier Doug Ford. In response to the government’s demand to slash executive pay at the power utility, the board of directors said Thursday it would reduce the chief executive’s pay level by 62 per cent and cut directors compensation by 47 per cent, saving $5-million annually. Story (Shawn McCarthy and Laura Stone, for subscribers)
CPPIB head worries about fallout if investors lose their appetite for private assets: Investors’ appetite for private assets is great right now. Mark Machin’s concern is what could happen if some of those investors need to find cash. Story (David Milstead, for subscribers)
Decision on who will represent Quadriga users is expected next Friday, judge says: More than 100,000 users collectively owed at least $250-million by beleaguered cryptocurrency trading platform QuadrigaCX will have to wait another week to learn who will represent them in court. Seventeen lawyers with insolvency and cryptocurrency expertise crammed a Halifax courtroom Thursday to submit arguments on who should represent the people who were registered as users with Quadriga, which abruptly shut down last month. Story (Jessica Leeder, for subscribers)
BMO hires Scott Brison for senior investment banking role: Bank of Montreal has hired Scott Brison into a senior role within its corporate and investment bank after the long-time politician announced he was retiring from government. On Thursday, BMO Nesbitt Burns announced that Mr. Brison is joining the dealer as a vice-chair in corporate and investment banking. He will be based in Toronto. Story (Tim Kiladze, for subscribers)
Brookfield posts US$16-billion annual revenue gain, eyes ‘bespoke’ investment opportunities: Brookfield Asset Management Inc., already among the biggest global asset managers, has US$34-billion ready to put into new investments. How much of that we’ll see deployed in 2019 is unclear, however, as Brookfield’s leaders suggest they believe we’re nearing the end of an investment cycle – and some of the best opportunities come after. Story (David Milstead, for subscribers)
Canaccord Genuity acquires U.S. boutique dealer for $60-million: Canaccord Genuity Group Inc. expanded its U.S. investment banking platform on Wednesday by acquiring New York-based boutique advisory firm Petsky Prunier LLC for $60-million. Canaccord is acquiring an employee-owned firm that offers merger-and-acquisition advisory services to mid-sized companies in the technology, internet, media and health-care sectors – areas where the Toronto-based dealer already has a domestic franchise. Story (Andrew Willis, for subscribers)
Insurance earnings: Two of Canada’s largest insurers reported earnings on Wednesday evening, with Sun Life Financial Inc. beating expectations and Manulife Financial Corp. falling a bit short. Sun Life Financial reported fourth-quarter net income of $580-million, or 96 cents per share, up from $207-million or 34 cents per share in 2017’s fourth quarter. Story (Clare O’Hara and David Milstead, for subscribers)
This is my new pick for the best research report ever written for investors: My pick for the single best short paper ever written for market participants of any skill level is “Decision-Making for Investors: Theory, Practice, and Pitfalls” by Michael Mauboussin, written in 2004 when he was chief investment strategist at Legg Mason. Now it appears he may have just published a better one. The author is currently the head of research for asset management firm Blue Mountain Capital Management LLC of New York. He’s also an adjunct professor of finance at Columbia University and sits on the board of trustees for the Sante Fe Institute, an organization that facilitates multidisciplined research in complexity. Story (Scott Barlow, for subscribers)
Another Stronach lawsuit pits Frank’s granddaughter against her aunt Belinda: The youngest member of the Stronach clan has added another strand to a web of lawsuits over control of the family fortune, as 18-year-old Selena Stronach went to court last week with a suit aimed at maintaining a jet-set lifestyle and limiting the role of her aunt Belinda Stronach, who is currently running the family’s billion-dollar horse-racing, real-estate and farming business. Story (Andrew Willis, for subscribers)
More than $400,000 in Quadriga cryptocurrency disappeared into so-called ‘cold wallets’: The court-appointed monitor overseeing the search for millions of dollars lost by Canadian cryptocurrency exchange QuadrigaCX says an additional half a million dollars worth of bitcoin has gone missing. Story (Alexandra Posadzki and Joe Castaldo, for subscribers)
Anson fund urges TSX to scrutinize planned Acasta Enterprises debt-for-equity swap: Hedge-fund manager Anson Advisors Inc. is asking the Toronto Stock Exchange to intervene in a planned refinancing of troubled Acasta Enterprises Inc. by the company’s newly minted co-CEOs. Anson took aim Tuesday at a proposal that would see Acasta co-chief executives Charles and Richard Wachsberg, who are twin brothers, convert $4.8-million of high-yield debt in a company they indirectly control into 6.5 million additional Acasta shares. Toronto-based Acasta was once Canada’s largest special acquisition corporation, or SPAC, with a $402-million war chest and an all-star list of backers, but now sports a market capitalization of just $55-million. Story (Andrew Willis, for subscribers)
Investors who financed Fortress projects unlikely to get paid: Investors who helped finance several major real estate projects for Fortress Real Developments Inc. have learned they will recover little of the money they invested in syndicated mortgage loans. The projects include the Collier Centre retail development in downtown Barrie, Ont., the Union Waterfront site in St. Catharines, Ont., and the Glens of Halton Hills site north of Toronto. Story (Janet McFarland, for subscribers)
The curious case on Toronto’s Bay Street: $500,000 Super Bowl pot goes missing: Two days before the game, word started to spread: The pot had gone missing. Every year around the Super Bowl, Bay Street stock traders and their friends participate in a high-stakes pool. Run by an old-school floor trader from the Toronto Stock Exchange, the private gambling affair is highly exclusive, and entry is open only to those with the right connections. Given the clientele, it is no pedestrian affair. A hundred slots are up for grabs at $5,000 a piece − payable in cash. The total pot is $500,000. Story (Tim Kiladze and Andrew Willis, for subscribers)
Morgan Stanley is buying Calgary’s Solium Capital for $1.1-billion: U.S. financial services giant Morgan Stanley is buying Calgary-based Solium Capital Inc. for $1.1-billion in the latest deal that will wrest a sizable technology player from Canadian control. The friendly transaction represents Morgan Stanley’s largest acquisition since the financial crisis in 2008, and allows it to meld its corporate wealth-management business with Solium’s software, used for administering employee stock-based compensation plans around the world. Story (Jeffrey Jones, for subscribers)
Cycle Capital hits first close of what it’s hoping will be largest cleantech fund in Canada: Montreal-based Cycle Capital Management Inc. has raised more than $100-million for what it hopes will be Canada’s largest private sector venture capital fund in clean technology – giving a boost to a sector that still relies largely on government support. Cycle Capital says it had amassed $109-million, with the goal of reaching between $150-million and $250-million for its fourth North American fund, targeting startups that specialize in areas such as green chemistry, biomass conversion, renewable energy, energy storage and efficiency and sustainable agriculture. Story (Sean Silcoff, for subscribers)
Former finance minister, ambassador and businessman Michael Wilson dies at 81: Michael Wilson, a former federal finance minister and stalwart of Canadian business who overcame personal tragedy in later life to become an advocate for mental-health support, has died at 81. Under prime minister Brian Mulroney, Mr. Wilson helped negotiate the North American free-trade agreement and brought in the federal goods and services tax, initiatives that were controversial at the time, but have survived to become pillars of federal policy. Story (Tim Kiladze and Eric Andrew-Gee)
Who’s afraid of open banking?: The deadline for consultations on the merits and risks of “open banking” was Monday. So, we ask: Who’s afraid of open banking? Consumers? Maybe. The big five banks? Probably. Regulators? Definitely. There are certainly reasons to pursue open banking, where new service providers can access customer data from the financial industry to offer more competitive and more innovative financial products. Opinion (Thorsten Koeppl and Jeremy Kronick, for subscribers)
Regulators grapple with rapid change in the financial-services sector: The speed and scope of change in the financial-services sector is unprecedented. Regulators are trying to wrap their minds around what’s happening. The future of cash, the need for bank intermediaries, the role of paper currencies, and fundamental notions of data privacy and bookkeeping are all in play. In the competition for customers, the tension between new players and old is not unusual. Opinion (Barry Campbell)
MORE FINANCIAL SERVICES NEWS AND DEALS NEWS FROM FRIDAY
IPO: Technology companies rarely make money before they go public. Twitter was unprofitable when it listed on the stock market. So were Snap, Spotify and SurveyMonkey. Story (for subscribers)
Listings: The three largest U.S. stock exchange operators said they will sue the Securities and Exchange Commission for overstepping its authority by ordering a pilot program to test banning lucrative payments exchanges make to brokers for resting stock orders. Story
The Streetwise newsletter is Tuesday to Saturday. If you’re reading this on the web, or if someone forwarded this e-mail to you, you can sign up for Streetwise and all Globe newsletters on our signup page.