IIROC announces settlement with Credit Suisse Securities (Canada) Inc.

VANCOUVER, Feb. 2 /CNW/ - A Hearing Panel of the Investment Industry Regulatory Organization of Canada (IIROC) has accepted a Settlement Agreement, which includes sanctions, between IIROC staff and Credit Suisse Securities (Canada) Inc.

In this agreement, Credit Suisse admits that it violated the Universal Market Integrity Rules (UMIR) by failing to comply with its trading supervisory obligations. The firm admits that in certain cases between May 2007 and October 2007, a monthly review of trading activity for possible manipulation of security prices at the market's close was either not conducted within a reasonable period or at all. Credit Suisse also failed to properly scrutinize a particular client's Direct Market Access (DMA) account which had been generating "red flag warnings" in earlier reviews for possible artificial pricing.

Credit Suisse has agreed to pay a $150,000 fine and $15,000 in costs. 

In particular, Credit Suisse admits that it violated UMIR 7.1(1) and UMIR Policy 7.1 by failing to:

  • Conduct artificial pricing reviews within a reasonable period of time for the months of May 2007, June 2007, and July 2007;
  • Conduct an artificial pricing review for October 2007; and
  • Question a particular client until December 27, 2007, despite the fact that the firm's artificial pricing reviews for August, September and November 2007 generated red flag warnings that a particular Direct Market Access (DMA) account was using algorithms to execute buy orders that appeared to create artificial prices.

In accepting the Settlement Agreement, the IIROC Hearing Panel said it was satisfied that the deficiencies in Credit Suisse's trade supervision for artificial pricing had been remedied.

IIROC began its formal investigation into the conduct of Credit Suisse Securities (Canada) Inc. on November 13, 2008. Credit Suisse is currently an IIROC-regulated firm.

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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:

Warren Funt
Vice President, Western Canada
Elsa Renzella
               Director, Enforcement Litigation


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