IIROC reaches settlement with three former All Group reps

The Manitoba Securities Commission (MSC) has approved a settlement with Investors Group Financial Services Inc. and Investors Group Securities Inc., in connection with alleged client overcharging. The firms agreed to voluntarily pay $750,000 to the Manitoba Treasury, along with $30,000 in costs to the commission.

The settlement stems from the discovery that the two affiliates of Winnipeg-based Investors Group failed to move eligible investors into a cheaper series of certain funds, for which the investors were qualified based on meeting asset thresholds.

According to the settlement agreement, the firms discovered the issue in the wake of a settlement between the Ontario Securities Commission and affiliates of Toronto-Dominion Bank, which first brought the issue of possible client overcharging to light.

Read: OSC & firms focus on overcharging

Investors Group self-reported its own possible overcharging to Manitoba regulators in December 2014, and launched a plan to pay compensation to investors.

“Investors Group did not establish, maintain and apply policies and procedures to establish a system of controls and supervision that consistently ensured that holders of the Investors Group funds who were eligible for a lower management expense ratio (MER) series of the same funds were so advised in a timely manner after they became eligible,” the MSC settlement agreement says.

Investors Group has paid $79 million in compensation to 93,941 affected investors, and enhanced its controls to prevent a recurrence of the overcharging issue, the settlement agreement notes.

No evidence of wrongdoing was uncovered, and that the firms fully co-operated with the regulators, the settlement confirms.

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