The Investment Industry Regulatory Organization of Canada (IIROC) has fined a former broker in British Columbia $50,000 for violating IIROC rules.

IIROC formally initiated the investigation into Samuel Scoten’s conduct in September 2011. The alleged violations occurred when he was a registered representative with a Surrey, B.C. office of TD Waterhouse Canada Inc.

On October 11, 2012 an IIROC hearing panel accepted a settlement agreement, with sanctions, between IIROC staff and Scoten.

Scoten admitted that he solicited and facilitated the purchase of shares without his employer’s consent, he engaged in discretionary trading, and that he provided IIROC staff with information that he knew or ought to have known was false.

Specifically, Scoten admitted to the following violations:

> between 2007 and 2009, he solicited and facilitated the purchase of previously issued shares of Asian Coast Development (Canada) Ltd. (ACDL) by some of his clients, without the knowledge or consent of his employer;

> between 2008 and 2010, he received compensation for his facilitation of his clients’ purchase of previously issued ACDL shares, without his employer’s knowledge or consent;

> in April 2010, he placed discretionary trades for client accounts even though they had not been designated as being discretionary accounts by his employer; and

> in June 2011, he informed IIROC staff that he had not received any compensation for the purchase of previously issued ACDL shares by some of his clients and that he only placed discretionary trades on behalf of two accounts on April 1, 2010, which he knew or ought to have known was false.

Scoten agreed to the following penalties:

  • a three-year prohibition from approval in any capacity;
  • that he successfully complete the Conduct and Practices Handbook Course prior to being eligible for approval in any capacity;
  • upon re-approval, a one-year period of strict supervision; and
  • a $50,000 fine to IIROC.

Scoten is no longer a registrant with an IIROC-regulated firm.