TORONTO, March 7 /CNW/ - A Hearing Panel of the Investment Dealers
Association of Canada (IDA) appointed pursuant to By-law 20 has accepted a
Settlement Agreement imposing penalties on Standard Securities Capital
Corporation (Standard), an IDA Member firm, and Mark Marcello, at all material
times (and currently) an approved person with Standard.
Following a settlement hearing, the Hearing Panel considered, reviewed
and accepted a Settlement Agreement negotiated between staff of the IDA,
Standard and Mr. Marcello. Pursuant to the Agreement, Standard and Mr.
Marcello admitted the following:
- In 2004, Standard violated by-law 29.3A, Regulation 1300.2 and Policy
2 by failing to maintain and implement an effective sales compliance
program in that it: (i) failed to develop and/or implement adequate
policies and procedures regarding maintaining evidence of daily and
monthly supervisory reviews; (ii) failed to develop and/or implement
adequate policies and procedures to ensure compliance with OSC Policy
33-601 (grey and restricted list requirements); (iii) engaged in
inappropriate business conduct in that it failed to maintain evidence
that it gave priority to orders for the accounts of customers over
all other orders for the same security at the same price, including
orders for employee accounts.
- Standard and Mr. Marcello also violated By-law 29.1, Regulation
1300.1, 1300.2 and Policy 2 in: (i) between May 2002 - November 2004
failing to adequately supervise a client account; (ii) between March
2003 and March 2006 failing to adequately supervise or inform
themselves relating to an employee's outside business activities;
(iii) between March 2003 and March 2006 failing to adequately
supervise and failing to learn and remain informed of essential facts
relative to a client account operated by a Standard employee and in
which the employee had a financial interest; and (iv) between July
2003 and February 2007 failing to adequately supervise and learn and
remain informed of essential facts relative to two client accounts
operated by a Standard employee and in which the employee had a
- Between May 2002 and April 2004, Mr. Marcello also violated
Regulation 1300.1(a) by failing to use due diligence to learn the
essential facts relative to a client and orders accepted on behalf of
the client and to ensure that such orders were within the bounds of
good business practice.
These matters were referred to Enforcement staff in 2005 following an IDA
2004 sales compliance review of Standard.
For its misconduct, Standard is required to pay a fine of $162,500 and
engage a compliance consultant to evaluate its compliance program and make
recommendations if necessary to address any outstanding compliance issues. Mr.
Marcello is to pay a fine of $47,500 and is suspended from acting as UDP for
Standard will pay costs of $62,500 and Mr. Marcello will pay costs of
In accepting the Settlement Agreement, the Hearing Panel noted that
Standard had already been fined $80,000 by Market Regulation Services Inc.
(RS) for certain events arising from the conduct of the same individuals that
were responsible for the events that caused concern about the level of
supervision in 2004 in this case. The Hearing Panel also noted that the
appointment of a compliance consultant is a failsafe measure to ensure that
compliance problems at Standard have been cleaned up.
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
role. It is IDA policy to ensure that where relevant, referrals to the
appropriate policing authority are made.
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