MONTRÉAL, Feb. 9 /CNW/ - A Hearing Panel of the Investment Industry
Regulatory Organization of Canada (IIROC) has accepted a Settlement
Agreement, with sanctions, between IIROC staff and National Bank Direct
Brokerage Inc. (NBDB).
With this agreement, NBDB admits it failed in its duty to provide supervision and maintain
adequate internal controls regarding one of its registered employees.
The firm also admits that it failed to maintain proper records and
continued the registration of its Chief Compliance Officer with the
regulatory authorities although this person was no longer employed with
NBDB agrees to a $75,000 fine, and to pay $25,000 in costs.
Specifically, NBDB admits that it:
failed in its duty to provide supervision and in its duty to establish
and maintain adequate internal controls, contrary to IIROC Rules 17.2A, 29.27, 1300.2, 2500 and 2700, when it allowed its representative Thi Sen Chher:
(i) to obtain a proxy for the brokerage accounts of a member of his
family, without registering these accounts as Pro accounts or ensuring
that they were registered as such;
(ii) to make additions, without supervision or verification, to that
client's mailing address and investment profile without their
(iii) to self-approve transfers of funds, without supervision or
verification, between his personal accounts and those of that client, a
member of his family, without the client's consent or approval.
failed to keep adequate records, contrary to IIROC Rules 17.2, 200 and 2500, section D , particularly:
(i) the keeping of physical acknowledgements confirming the receipt,
reading and understanding of the 2005 Compliance Manual by the
employees of NBDB.
engaged in conduct unbecoming by continuing the registration of its
Chief Compliance Officer with the regulatory authorities even though
this person was no longer in the employ of NBDB, thereby contravening
the provisions of IDA By-law 38.12 (now IIROC Rule 38), and IDA Policy number 6 (now IIROC Rule 2900) and Policy number 8 (now IIROC Rule 3100).
The violations occurred between November 2002 and May 2007. IIROC (then
Investment Dealers Association of Canada (IDA)) began its formal
investigation into NBDB's conduct on October 24, 2007, after the firm
reported the situation to the IDA. NBDB 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
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