VANCOUVER, Dec. 2 /CNW/ - In a settlement agreement with the British Columbia Securities Commission, Mackie Research Capital Corporation paid $225,000 and made certain undertakings, after admitting that it contravened securities laws when it executed trades in securities that were subject to cease trade orders.
The investment dealer previously breached a cease trade order because of an inadequate compliance system. On Feb. 27, 2004, a commission panel after a hearing, ordered the Toronto-based dealer - then called Research Capital Corporation - to make changes to its systems and procedures. The dealer, which has a Vancouver branch office, complied with the BCSC order by implementing a new compliance system.
In the settlement agreement, the dealer admitted that certain aspects of its new compliance system broke down in mid-2005. The system failed to detect trades of cease-traded securities quoted on the U.S. over-the-counter markets, resulting in the dealer again breaching BCSC cease trade orders. The dealer admitted that it could have taken a number of steps to detect the breakdown.
From mid-2005 to September 2007, the dealer executed 46 trades that, collectively, contravened eight cease trade orders. The dealer also contravened securities laws when it failed to establish and apply adequate written procedures to ensure it was not executing trades for its clients in securities that were subject to a cease trade order.
BCSC staff detected some of the illegal trades and notified the dealer. It was only after this intervention that Mackie Research Capital became aware of the deficiency in the system and took steps to address it.
In addition to the $225,000 payment, Mackie Research Capital undertakes to comply with B.C. securities laws, rules, and any applicable regulations. It will also engage an independent monitor, approved by the executive director, to review its compliance system and written procedures relating to cease trade orders.
The monitor will conduct an initial review within 12 months after the date of the settlement agreement and a follow-up review one year later, and will provide a written report after each review to the executive director.
The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the settlement agreement on our website www.bcsc.bc.ca by typing in the search box, Mackie Research Capital Corporation or 2010 BCSECCOM 646. If you have questions, contact Ken Gracey, media relations, 604-899-6577.
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