Canada’s mega regulator, the Investment Industry Regulatory Organization (IIROC), will hold a hearing on April 16 to consider a proposed settlement with Toronto-based Laurentian Bank Securities Inc. The regulatory action was scheduled in connection with alleged supervisory lapses involving the dealer’s oversight of trading operations, IIROC announced Wednesday.
The terms of the settlement will only be released if it’s approved by an IIROC hearing panel.
Specifically, the proposed settlement involves allegations that Laurentian Bank Securities Inc. failed to “implement and maintain an adequate trading supervision system and failed to comply with its trading supervision obligations,” the IIROC said in a notice.
The IIROC originally launched its investigation into Laurentian Bank Securities Inc.’s conduct in July 2018. LBS was previously fined by the same self-regulatory organization $220,000 to settle allegations that it violated securities rules due to supervisory failures.
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According to the settlement, an IIROC compliance review in 2011 found the firm didn’t ensure three reps had properly fulfilled their proficiency requirements and also failed to supervise another rep who had conditions placed on his registration.
IIROC fines TD Waterhouse $4 million
Laurentian Bank Securities was also part of an industry-wide crackdown in connection with the meltdown of Canada’s $32-billion asset-backed commercial paper market in 2007. The Quebec securities commission hit the firm in this case with a penalty of $3.2 million. The heaviest fine was paid by National Bank Financial, which agreed to pay $75 million to the L’Autorité des marchés financiers (AMF).
Earlier in March, the securities industry’s self-policing organization handed down a record fine on TD Waterhouse Canada Inc., a subsidiary of The Toronto-Dominion Bank. The Toronto-based company made a deliberate business decision not to comply with CRM2 requirements to provide position cost information in quarterly retail client account statements for certain securities positions, the regulator said.
In addition to the fine, the discount brokerage must pay costs of $28,497 for its non-compliance since December 2015. TD Waterhouse suggested paying a maximum of $500,000 while IIROC had requested a $5-million fine.