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The former chief financial officer of the now-defunct investment firm Octagon Capital Corp. has been permanently banned by the Investment Industry Regulatory Organization of Canada.

The settlement agreement between Christopher Everest and IIROC, which has been approved by a hearing panel, will also see Mr. Everest pay a $10,000 fine.

Mr. Everest admitted that he failed to ensure the company’s risk-adjusted capital and other financial circumstances were accurately reported, according to a news release issued by the regulator on Monday.

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Risk-adjusted capital is a measure of a firm’s capital that has been adjusted for regulatory purposes according to a specific formula. IIROC requires all of its dealer members to maintain risk-adjusted capital greater than zero, and firms must immediately inform the regulator if the measure turns negative. It is one of the regulator’s early warning indicators that a firm’s capital, profitability or liquidity are stressed.

Octagon Capital, a subsidiary of Octagon Capital Partners, was launched in 1993 and at one point employed more than 100 people, including traders and investment bankers.

The firm declared bankruptcy in late 2015 after IIROC discovered it was capital-deficient and suspended its membership.

IIROC said it now considers the matter concluded. “IIROC’s permanent ban for failing to report on Octagon’s financial circumstances is a significant penalty that reflects the severity of Mr. Everest’s actions,” IIROC spokeswoman Andrea Zviedris said in an e-mail.

“It’s important for us to signal to the industry that consequences will match the seriousness of the wrongdoing – particularly when it relates to protecting investors and the integrity of Canada’s capital markets."

Greg Temelini, the lawyer representing Mr. Everest, said his client is happy to have put the matter behind him.

“At all times, Mr. Everest acted in good faith,” Mr. Temelini said in a statement. “All of his decisions were based on his belief that the company had sufficient assets to operate.”

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