A hearing panel of the Investment Industry Regulatory Organization of Canada (IIROC) has accepted a settlement agreement, which included disciplinary sanctions, between IIROC staff and Laurentian Bank Securities Inc. (LBS), the self-regulatory organization announced on Thursday.
LBS agreed to pay a $200,00 fine and $20,000 in costs to settle allegations that it violated securities rules due to supervisory failures.
The firm admitted it failed to ensure three reps had properly fulfilled their proficiency requirements, and it failed to properly supervise another rep who had conditions placed on his registration.
According to the settlement, an IIROC compliance review in 2011 found a deficiency in LBS’ 90-day training program. A subsequent review in 2012 found that the firm did not make sure that its reps had completed the training.
IIROC also found that LBS didn’t have controls in place to ensure that supervisory conditions placed on a rep’s registration were being fulfilled.
In accepting the settlement, the hearing panel said, “… while no client complaint was filed, and no monetary loss was incurred as a result of the respondent’s contraventions, the fact remains nonetheless that these contraventions are serious, since they affect the fundamental nature of the role of the dealer member, which must exercise adequate supervision over its employees and its activities.”
The panel also noted that LBS has made changes to ensure that these kinds of violations don’t happen again, and that it has participated in a pilot project with IIROC’s registration department involving its registration processes and procedures, which represent mitigating factors in the case.
The panel ruled that although the proposed sanctions “fall at the lower end of what constitutes a reasonable range of appropriateness,” they are “not contrary to public order, nor would they tend to bring the administration of justice into disrepute.”
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