Sean Driscoll, former Chief Executive Officer and Director, Sentry Investments
Sentry Investments, one of Bay Street's best-known asset managers, replaced its chief executive officer following an investigation into its mutual fund sales practices, the company has admitted.
On Monday, The Globe and Mail had contacted the investment firm, which manages $18-billion in client assets, to ask why it changed chief executive officers without publicly announcing the turnover – something it normally does for senior leaders. Sentry was also asked if compliance issues contributed to the decision.
In an interview, Phil Yuzpe, Sentry's new chief executive officer, said the change was nothing more than an orderly succession plan. Mr. Yuzpe had previously been president, so he was already next in line, and Sean Driscoll, the former CEO, had long planned to take on a role with his family's holding company – which has a major stake in Sentry.
"There are no hidden things here," Mr. Yuzpe added.
Shortly after being contacted by the Globe, and nearly two weeks after making the CEO change, Sentry released a public statement announcing it. "Going forward, Sean will focus more on his role as president of his family holding company and its diverse business interests," the firm said.
Late Friday, Sentry issued a statement clarifying the matter. The firm said it "wishes to correct statements contained in a media report published earlier this week relating to recent personnel changes," though it did not specify the report.
In the new statement, Sentry said its board of directors formed a special committee in September, 2016, "to examine compliance issues related to sales practices," after the Ontario Securities Commission commenced an investigation into its mutual fund sales.
Sentry cited an investigation pertaining to 'National Instrument 81-105 – Mutual Fund Sales Practices,' a regulatory document that outlines rules against abusive tactics such as sales representatives incentivizing others to sell their products with gifts and other forms of non-cash compensation, among other things.
"Sentry has taken a number of actions to begin correcting these sales practices issues," the firm said, including appointing Mr. Yuzpe as CEO. Sentry also said that an external compliance consultant is "being retained to review and recommend improvements to Sentry's internal policies, procedures and practices, and internal controls," and this consultant will report findings to the OSC.
Sentry declined to answer questions about the new statement. The Ontario Securities Commission declined to comment on its investigation.
Mr. Driscoll's departure extends a string of senior leadership changes at the asset manager that date back 18 months.
He was first named co-chief executive officer in 2013 and initially shared the role with outgoing head Sandy McIntyre for a few months. At the same time, Mr. Yuzpe was named president and chief operating officer and Dennis Mitchell was appointed chief investment officer.
Mr. Mitchell suddenly departed in the summer of 2015, catching Bay Street by surprise. He is a well-known figure in asset management circles, and in some ways, was the face of Sentry on television. Almost nothing was said publicly about the abrupt departure.
In an interview with The Globe at the time, then-president Mr. Yuzpe wouldn't say much "out of respect for Dennis," but added that "unequivocally, the decision had nothing to do with the management of the funds and we have no concerns over the future management of the funds." Mr. Mitchell is now a senior vice-president at Sprott Asset Management.
Because he left so quickly, Sentry was left with a hole to fill, and Mr. McIntyre, the former CEO, assumed a prior role of his as chief investment officer. He stayed in that position until August, 2016, when Sentry hired Gaelen Morphet as CIO from Empire Life Investments.
Then, in December, 2016, Sentry's chief compliance officer Jasmin Jabri left the asset manager. Reached Saturday, Ms. Jabri wrote that she resigned voluntarily in early December.
A month later, CEO Sean Driscoll left the firm. His father, Sentry founder John Driscoll, remains chairman.
Tim Kiladze