IIROC announces penalties for Kenneth Nott, Aidin Sadeghi, Christopher Kaplan, Robert Nemy and Jake Poulstrup

TORONTO, June 7, 2011 /CNW/ - A Hearing Panel of the Investment Industry Regulatory Organization of Canada (IIROC) has imposed penalties against five former employees of TD Securities Inc., who were found to have violated the Universal Market Integrity Rules (UMIR) by entering artificial closing bids in 323 instances over a six-month period.

In its penalty decision dated April 30, 2011, the panel imposed the following penalties.

  • Kenneth Nott -$15,000 fine and $7,500 in costs. Mr. Nott is also required to work under close supervision for six months, the terms of which shall be determined by his employer. The panel also stated that there would be no order of suspension because Mr. Nott has been unable to obtain employment since September 2008;
  • Aidin Sadeghi - $5,000 fine. The panel also noted that it would not impose an order of suspension or for supervision against Mr. Sadeghi, and strongly recommended that the close supervision order which is currently in effect against him be rescinded;
  • Christopher Kaplan - $35,000 fine and $15,000 in costs. Mr. Kaplan is also required to work under close supervision for six months, the terms of which shall be determined by his employer. The panel also noted that there would be no order of suspension as Mr. Kaplan was unable to obtain employment for 13 months after September 2008. In addition, the panel ordered that the trade restrictions in effect against Mr. Kaplan shall cease to apply immediately;
  • Robert Nemy - $75,000 fine and $37,500 in costs. Mr. Nemy is also required to work under close supervision for six months, the terms of which shall be determined by his employer. The panel also noted that there would be no order of suspension as Mr. Nemy has been unable to obtain employment since September 2008; and
  • Jake Poulstrup - $20,000 fine and $10,000 in costs. Mr. Poulstrup is also required to work under close supervision for six months, the terms of which shall be determined by his employer. The panel also noted that there would be no order of suspension as Mr. Poulstrup was unable to obtain employment for 13 months after September 2008. In addition, the panel ordered that the trade restrictions in effect against Mr. Poulstrup shall cease to apply immediately.

"They have paid an extremely heavy price for their errors in judgment," the panel stated in issuing the penalties. "The panel is satisfied there is no risk of them repeating their conduct."

The penalty relates to the panel's revised decision on the merits dated April 30, 2011, which found that these five individuals entered orders without the intent of executing them, but rather to create artificial closing prices that would misrepresent the performance and actual demand for securities in the market, contrary to UMIR 2.2(2)(b) and UMIR Policy 2.2.

After reviewing the five individuals' trading activity in five stocks, the panel found that each had entered artificial closing bids for one or more of the five stocks as follows:

  • Kenneth Nott, 230 times;
  • Aidin Sadeghi, three times. The panel dismissed 54 other allegations of entering artificial closing bids against Mr. Sadeghi, and noted that none of the three bids were part of a pattern of entering artificial closing bids;
  • Christopher Kaplan, 37 times. The panel dismissed four allegations of artificial closing bids;
  • Robert Nemy, 39 times; and
  • Jake Poulstrup, 14 times. The panel also dismissed 15 allegations of artificial closing bids against Mr. Poulstrup.

The violations occurred between May and October 2005, while the five individuals were Registered Representatives at TD Securities Inc., an IIROC-regulated firm. Market Regulation Services Inc. (now part of IIROC) began its formal investigation into the individuals' conduct in January 2006. Christopher Kaplan, Jake Poulstrup and Aidin Sadeghi are currently Registered Representatives with W.D. Latimer Co. Limited, an IIROC-regulated firm. Kenneth Nott and Robert Nemy are no longer registered with an IIROC-regulated firm.

* * *

IIROC investigates possible misconduct by its member firms and/or individual registrants. It can bring disciplinary proceedings which may result in penalties including fines, suspensions and permanent bans or terminations for individuals and firms.

All information about disciplinary proceedings relating to current and former member firms is available in the Enforcement section of the IIROC website. Background information regarding the qualifications and disciplinary history, if any, of advisors currently employed by IIROC-regulated firms is available free of charge through the IIROC AdvisorReport service. Information on how to make investment dealer, advisor or marketplace-related complaints is available by calling 1.877.442.4322.

IIROC is the national self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada. Created in 2008 through the consolidation of the Investment Dealers Association of Canada and Market Regulation Services

Inc., IIROC sets high quality regulatory and investment industry standards, protects investors and strengthens market integrity while maintaining efficient and competitive capital markets.

IIROC carries out its regulatory responsibilities through setting and enforcing rules regarding the proficiency, business and financial conduct of dealer firms and their registered employees and through setting and enforcing market integrity rules regarding trading activity on Canadian equity marketplaces.

SOURCE Investment Industry Regulatory Organization of Canada (IIROC) - General News

For further information:

Jeff Kehoe
Vice President, Enforcement
416.943.6996
jkehoe@iiroc.ca
          Elsa Renzella
Director, Enforcement Litigation
416.943.5877
erenzella@iiroc.ca

 


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