Home Capital Group (HCG.TO) is reportedly in settlement talks with the Ontario Securities Commission.
The Globe and Mail and Financial Post reported on the negotiations late Thursday. The FP indicated a settlement could cover the allegations made against Home Capital and former executives Gerald Soloway, Martin Reid and Robert Morton.
Home Capital shares surged almost 13 per cent on Thursday, taking the stock to its highest close since late April when the alternative lender announced its emergency $2-billion credit line and first detailed an eroding deposit basis in its high interest savings accounts.
A spokesperson for Home Capital declined to comment when reached by BNN. OSC spokesperson Kristen Rose wouldn't confirm the negotiations.
"No matter what the stage, settlement discussions are without prejudice, privileged and must be held in strictest confidence by all parties. If and when a matter is settled and approved by the Commission, the settlement agreement will be made public and only that time," Rose wrote in an email to BNN.
The Globe also reported Home Capital has received preliminary takeover interest from the likes of Onex and Brookfield Asset Management, described by a Globe source as being "speculative, conditional and not that attractive."
Purpose Investments CEO Som Seif explained in an interview with BNN Thursday why a buyer should brace for the risk it would inherit by acquiring Home Capital.
"It has to be a brand that can effectively withstand the short attack that will happen," he said.
"One-hundred per cent, the shorts will move from one name to the next. That's why you're seeing the players that would be logical buyers of this stay away — because they just cannot take on that type of risk in their business."
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