(July 25 – 12:20 ET) – The Ontario District Council of the Investment Dealers Association of Canada has imposed a discipline penalty on HSBC James Capel Canada Inc. The firm is now known as HSBC Securities (Canada) Inc.
HSBC admitted that between mid-December 1998 through Jan. 31, 1999, it failed to maintain risk-adjusted capital greater than zero. It also failed to maintain a proper system of books and records.
The failure resulted from the acquisions of Moss Lawson & Co. Ltd. and Gordon Capital Corp. by HSBC in July and December 1998. Differences in information system platforms caused reconciliation problems. HSBC notified the IDS of the problems in January 1999.
Responses to questions on the Joint Regulatory and Financial Questionnaire and Report for the period ending Dec. 31, 1998, indicated that HSBC did not maintain adequate books and records for the relevant time period because it did not accurately reflect the status of certain accounts for internal reconciliation purposes.
The technology and reconciliation issues have been resolved, and no client funds were put at risk/ HSBC allocated numerous resources, recruited experienced staff and put new procedures in place to correct the problems.
HSBC receives a fine of $60,000. In addition, it is required to pay $10,710 toward the costs of the investigation.
For a complete Summary of Facts, please see IDA Disciplinary Bulletin No. 2748 at www.ida.ca.
-IE Staff