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April 24 (Reuters) - Home Capital Group Inc HCG.TO said founder and former CEO Gerald Soloway, who has been accused by regulators of making "materially misleading statements" to investors, will step down from the board once a replacement is found.
The Ontario Securities Commission (OSC) on Wednesday accused Home Capital, Canada's biggest non-bank mortgage lender, of making "materially misleading statements" to investors.
The regulator also issued allegations against the company's former chief executives, Soloway and Martin Reid, and current Chief Financial Officer Robert Morton.
Home Capital Group said on Monday that Morton "will assume responsibilities for special projects outside the financial reporting group" after the company files its first-quarter results. Blowes, a former CFO, will assume the role on an interim basis.
"These are important steps in rebuilding confidence and putting the focus back on our profitable underlying business and its solid performance," said Kevin Smith, chair of the company's board.
The company said it had a short list of candidates, and intends to identify a replacement for Soloway as soon as possible.
Home Capital said on Friday it would defend itself against allegations by regulators that it withheld information about fraud by mortgage brokers. July 2015, the company said it had suspended contracts with 45 independent mortgage brokers after an investigation found they had falsified information about borrowers' incomes.
Home Capital said at that time that it had released the information following a request by the OSC.
Reid's contract was terminated in March, and longtime director Bonita Then was appointed to the role on an interim basis.
The company said on Monday it was actively recruiting a CEO, and a successor will be named as soon as possible.
Home Capital also said Bank of Nova Scotia would resume sales of Home Trust deposit products from Monday, subject to a certain cap.
The OSC has set a hearing on the matter for May 4.
Home Capital's shares had fallen 20.7 percent on Thursday, but gained 8.7 percent on Friday.