IN THE MATTER OF Scotia Capital Inc. - Settlement

TORONTO, Dec. 21 /CNW/ - On December 21, 2009, a Hearing Panel of the Investment Industry Regulatory Organization of Canada (IIROC) accepted a Settlement Agreement between the IIROC Staff and Scotia Capital Inc. (the "Respondent"). Pursuant to the Settlement Agreement, the Respondent admitted that:

Between July 25 and August 10, 2007, the Respondent failed to adequately respond to emerging issues in the Coventree asset-backed commercial paper (ABCP) market insofar as it continued to sell Coventree ABCP without engaging Compliance and other appropriate processes for the assessment of such emerging issues, contrary to Investment Dealers Association By-law 29.1 (ii) (now IIROC Dealer Member Rule 29.1(ii)).

    
    Pursuant to the Settlement Agreement, the Hearing Panel imposed the
following penalty against the Respondent:

    (a) Payment of $28,950,000 pursuant to IIROC Dealer Member Rules;

    (b) Payment of investigation costs of $320,000; and

    (c) The retention of an independent consultant to verify the remedial
        actions already taken by the Respondent in relation to its fixed
        income business.
    

IIROC formally initiated the investigation into the Respondent's conduct on February 13, 2008. The alleged violation occurred when the Respondent was a member firm of the Investment Dealers Association (IDA). The Respondent is currently an IIROC dealer member.

The Hearing Panel will issue its Reasons and Decision on a later date. The approved Settlement Agreement is available at: www.iiroc.ca.

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: Alex Popovic, Vice President, Enforcement, (416) 943-6904, apopovic@iiroc.ca; Jeff Kehoe, Director, Enforcement Litigation, (416) 943-6996, jkehoe@iiroc.ca


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