The Investment Industry Regulatory Organization of Canada (IIROC) is seeking to suspend a couple of brokers who are still serving clients pending an appeal of the Ontario Securities Commission’s (OSC) finding that they violated securities rules against insider trading and tipping, IIROC announced on Friday.
On Nov. 17, IIROC will apply to hold an expedited hearing to seek a registration suspension against Paul Azeff and Korin Bobrow, a pair of reps that the OSC ordered banned earlier this year, after it found that they engaged in insider trading and tipping. They are appealing that decision, and the penalties ordered against them by the OSC, to the courts.
In the meantime, IIROC seeking an order suspending their registration, and requiring them to cease dealing with the public, after an Ontario court denied their motion for a stay of the sanctions imposed on them by the OSC.
Back in August, the OSC ordered that Azeff and Bobrow should be banned from trading and from registration for 10 years, along with other sanctions.
In October, a court declined to stay those sanctions pending the outcome of their appeal, the IIROC notice of hearing says. IIROC reports that the court said that it was, “not in the public interest to grant the stay which would allow [the respondents] to conduct themselves in registerable activities”.
See: Court dismisses bid to stay sanctions in insider trading and tipping case
In addition a recent compliance review of Azeff and Bobrow’s current dealer, Euro Pacific Canada Inc., found deficiencies in the supervisory conditions that have been imposed on their registrations, pending the outcome of the regulatory proceedings, the IIROC notice says.
In August, IIROC’s Business Conduct and Compliance (BCC) Department examined Euro Pacific’s business, and, “… uncovered a number of problems with the supervision of the respondents, including a number of failures to comply with the supervision conductions,” the IIROC notice says.
As a result, “A suspension of the respondents’ approval with IIROC and a prohibition on dealing with the public is required given the seriousness of the misconduct found by the commission, the Divisional Court’s dismissal of the respondents’ motion for a stay and the BCC department’s findings that the supervision conditions are not being complied with,” the IIROC notice says.