TORONTO, June 3 /CNW/ - A Hearing Panel of the Investment Industry Regulatory Organization of Canada (IIROC) has accepted a settlement agreement between IIROC staff and James Martin MacMenamin. Mr. MacMenamin has admitted to entering orders on stocks he did not intend to execute and to entering orders on stocks that he should have known would likely artificially boost their closing bid price.
Sanctions against Mr. MacMenamin agreed to as part of the May 21, 2010 settlement include the payment of a $25,000 fine and $5,000 in costs. The written reasons for the Hearing Panel's decision will be published when available.
Mr. MacMenamin has admitted that certain trading activity by him in a proprietary inventory account at Jones, Gable & Company Ltd. was a breach of IIROC's Universal Market Integrity Rules 2.2(2)(a), 2.2(2)(b) and UMIR Policy 2.2. Specifically, he agreed that he:
- Entered an order for shares in New Shoshoni Ventures on the TSX
Venture Exchange that he knew or ought to have known would create, or
could reasonably be expected to create, an artificial closing bid
price for those shares. The proprietary account at Jones, Gable held
New Shoshoni shares and Mr. MacMenamin was entitled to a portion of
its profits, based on a valuation of the holdings. His order was made
on the same day the company calculated the value of the account,
using a calculation based on the share's closing bid price.
- Entered orders for Class A and B shares in Arbor Memorial Services
Inc. and for shares in Accord Financial Corp. on the TSX that he knew
or ought to have known he did not intend to execute. Mr. MacMenamin's
orders enticed an algorithmic trading program to displace his order
as the best displayed bid or offer price. He then cancelled his order
and bought or sold from that algorithmic order, which allowed him to
purchase shares at a lower cost and to sell shares at a higher price.
IIROC began its investigation into Mr. MacMenamin's behaviour on June 3, 2009. The violations occurred between April and December, 2008, when he was registered as a Trader and employed at the Toronto office of Jones, Gable. He is not currently a registrant with an IIROC-regulated firm.
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: For further information: Jeff Kehoe, Acting Vice President, Enforcement, (416) 943-6996, firstname.lastname@example.org