Securities regulators have settled disciplinary allegations against Montréal-based PEAK Securities Inc., which admitted to supervisory failures and overcharging clients.
An Investment Industry Regulatory Organization of Canada (IIROC) hearing panel approved a settlement with the firm that will see it pay $130,000 in fines and $5,000 in costs for a couple of IIROC rule violations.
According to the settlement, the firm overcharged about 500 clients by a total of $191,500 between 2012 and 2018. The overcharging stemmed from erroneously including products that paid trailer commissions within certain fee-based accounts.
The settlement stated that “securities containing embedded compensation were not excluded from the annual fee calculation and some clients therefore overpaid.”
The firm self-reported the overcharging and reimbursed overcharged clients with interest, the settlement noted.
In addition to the overcharging issue, the settlement also addressed supervisory failures that were uncovered in IIROC compliance reviews, which found several deficiencies.
In 2018, the self-regulatory organization imposed conditions on the firm’s SRO membership due to the compliance issues it uncovered. Those conditions were lifted in June, as the firm had tightened its controls.