IIROC announces settlement for Penson Financial Services Canada Inc.

MONTRÉAL, Nov. 10, 2011 /CNW/ - A Hearing Panel of the Investment Industry Regulatory Organization of Canada (IIROC) has accepted a settlement agreement, with sanctions, between IIROC staff and Penson Financial Services Canada Inc. (Penson).

With this agreement, Penson has admitted that it failed to establish and maintain adequate internal controls, and that it failed to ensure employees understood their responsibilities to conduct certain reviews.

The penalty against Penson includes a $225,000 fine and $20,000 in costs.

Specifically, Penson has admitted to:

  • Violating IDA By-law 17.2A and IIROC Rule 17.2A by:
    (i)     Failing to establish and/or maintain adequate internal controls related to certain accounts of Evergreen Capital Partners Inc.; and
    (ii)     Failing to establish appropriate controls and procedures to ensure the proper reporting of margin required on Introducing Brokers' accounts;


  • Violating IDA By-law 29.27 and IIROC Rule 29.27 by failing to ensure that each partner, director, officer, registered representative, employee and agent of the firm understood their responsibilities relating to the review of all Introducing Brokers' inventory accounts and accumulation accounts.

The violations occurred from March to October 2008. IIROC began its investigation into the firm's conduct in November 2008. Penson Financial Services Inc. is 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:

Carmen Crépin
Vice President, Québec
Elsa Renzella
Director, Enforcement Litigation


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