TORONTO, Aug. 24 /CNW/ - A Hearing Panel of the Investment Dealers
Association of Canada (IDA), appointed pursuant to By-law 20, has found Chak
(Jason) Ng, at the relevant time a Registered Representative at the Toronto
York Street branch of HSBC Securities (Canada) Inc., an IDA Member firm,
guilty of violating By-law 29.1 for unknowingly facilitating a market
manipulation in the stock of Pender International Inc. (Pender). The Hearing
Panel also found that Mr. Ng violated Regulation 200.1(i)(3) by taking
instructions for various accounts from Michael Mitton, the perpetrator of the
manipulation, notwithstanding that Mr. Mitton had no trading authorization
over those accounts. The Hearing Panel also stayed a charge that Mr. Ng had
violated Regulation 1300.1(a) because it determined that offence to be
included in the violation of By-law 29.1 described above.
In October 2004, Mr. Ng was introduced to an individual at the offices of
Trillion Financial Group, a financial services company, who opened an account
with him. This individual introduced him to a number of other individuals who
also opened accounts with Mr. Ng. For seven of the ten accounts opened, the
only stock traded in the accounts was Pender's stock. Between October 20 and
November 22, 2004, these accounts made up a significant portion of the buying
activity in Pender's stock and were part of the manipulation carried out by
Mr. Michael Mitton. Mr. Ng did not question this activity until he was
directed to do so by his employer's compliance department. Michael Mitton was
criminally charged with fraud and money laundering with respect to the
manipulation of Pender and was ultimately sentenced to seven years on the
fraud charge and to three years on the money laundering charge.
The Hearing Panel found that while Mr. Ng did not know of the
manipulation, Mr. Ng's conduct - in all of the circumstances - amounted to
gross negligence, which clearly amounts to conduct unbecoming.
Mr. Ng is currently employed with Research Capital Corporation, a Member
of the IDA.
The penalties imposed against Mr. Ng will be determined at a penalty
hearing to be set at a future date.
IDA staff acknowledge and thank the Ontario Securities Commission,
Integrated Markets Enforcement Team and the U.S. Securities and Exchange
Commission for their assistance in this matter.
The Investment Dealers Association of Canada (IDA) is the national
self-regulatory organization of the securities industry. The IDA's mission is
to protect investors, foster market integrity and enhance the efficiency and
competitiveness of the Canadian capital markets. The IDA enforces rules and
regulations regarding the sales, business and financial practices of its
Member firms and their approved persons. Investigating complaints and
disciplining Members and approved persons is part of the IDA's regulatory
For further information:
For further information: Alex Popovic, Vice President, Enforcement,
(416) 943-6904 or firstname.lastname@example.org; Jeff Kehoe, Director, Enforcement
Litigation, (416) 943-6996 or email@example.com