The Ontario Securities Commission (OSC) on Thursday approved a no-contest settlement agreement involving alleged client overcharging with two dealer affiliates of Toronto-based Assante Wealth Management (Canada) Ltd.
The dealers will make a voluntary payment of $165,000 to the OSC, including $25,000 in costs.
According to the settlement, the dealers are also in the process of paying more than $3.8 million in compensation to clients whowere in effect overcharged by not being informed that they qualified for lower-cost versions of certain investment funds. Approximately 5,400 clients were allegedly affected by the issue.
In settling the case, the dealers neither admit nor deny the allegations.
In approving the settlement, the OSC panel said it did so in the public interest, based on the fact that the firms self-reported the issue, that there is no allegation of dishonest conduct and that the firms are both compensating affected clients. The firms also have introduced controls to prevent a similar issue from happening in the future.
“To maintain confidence in the market, it is important that companies review their internal compliance systems,” said Jeff Kehoe, director of enforcement at the OSC,” in a statement.
“We place a high value on the integrity of our client relationships and are pleased to have closed this matter by compensating affected clients this past September, and with this agreement with OSC staff,” says Sean Etherington, president of Assante Wealth Management, in a newsrelease.
The overcharging issue at the Assante dealers appears to have come to light in the wake of the OSC’s first-ever no-contest settlement with several affiliates of Toronto-Dominion Bank in 2014. Since then, the commission has concluded 10 no-contest settlements, including eight that involve allegations of client overcharging.
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