Standard Securities Capital Corp. has been ordered to immediately cease dealing with the public after failing to meet compliance standards, the Investment Industry Regulatory Organization of Canada announced on Monday.

According to the regulatory organization, Toronto-based Standard Securities Capital Corp. has admitted to failing to designate a Chief Compliance Officer and an Ultimate Designated Person responsible for discharging its obligations, as of July 11. Effective July 10, Mike Bignell, former chief compliance officer and ultimate designated person, resigned from Standard Securities.

Bignell’s resignation came after an agreement in which Standard Securities sold its assets to Wolverton Securities earlier this year. Standard Securities subsequently notified IIROC of its intention to resign its membership, but the resignation is still pending.

On Aug. 11, an IIROC hearing panel accepted a settlement agreement between IIROC staff and Standard Securities Capital Corp. related to the compliance issues, and imposed a penalty, the regulator said.

As part of the penalty, Standard Securities’ membership with IIROC has been immediately suspended, and the company has been ordered to immediately cease dealing with the public.

IIROC said that Standard Securities would maintain its $2.7 million Financial Institution Bond until the resignation of its IIROC membership becomes effective, unless otherwise agreed to by the vice-president of financial and operations compliance of IIROC.

In addition, Standard Securities will enter into an escrow agreement in which it will deposit its remaining assets, subject to reasonable terms and exceptions acceptable to IIROC, until all outstanding legal actions initiated by its former clients are resolved.

IIROC formally initiated the proceeding regarding the company’s conduct in mid-July. There are currently two outstanding legal actions, initiated by former clients, claiming damages against Standard Securities, IIROC noted.

IE