Toronto Stock Exchange Regulation Services says it will convene a discipline hearing against one rep, while adjourning an earlier hearing in a high closing case.

The new hearing is being staged to determine whether William Snowie, a registered rep with W.D. Latimer Co., contravened or failed to comply with TSE rules.

TSE RS alleges that between Sept. 1 and Nov. 30, 1999, Snowie entered bids to “execute a trade on behalf of a principal or a non-client account when the effect of such action was to establish an artificial quotation in the listed security.” The hearing will be held on November 6 at the TSE.

Also, TSE advises that it has adjourned its hearing against Research Capital trader Laudalino Da Costa, which commenced on October 10, until November 26-30 at ADR Chambers.

In that case, the TSE alleges that between Nov. 23, 1998 and March 4, 1999, Da Costa executed trades in listed securities for the account of a customer, Acuity Investment Management, when there was reason to believe that the intended purpose of the trades was to establish an artificial price or a “high closing” price. It also alleges that Da Costa entered orders without first time-stamping them.

The TSE says the trade orders demonstrate a pattern of high closing because all of the orders were limit orders entered by Da Costa after 3:45 p.m. and all orders hit an existing offer, therefore receiving an immediate fill. All but one of the securities traded on average less than 11 times per day and trades entered late in the day for such illiquid securities are more likely to be the final trade of the day, setting the closing price for the security. All of the orders became the last trade of the day and therefore set the closing price for the security for that date. All of the orders were executed on up-ticks.

It says, “As an experienced trader, Da Costa knew that institutional fund managers, such as Acuity, might be motivated to establish artificial prices or high closing prices to increase the value of their portfolios. Furthermore, Da Costa had already been alerted by the ASE to a potential problem with Acuity’s trading practices and he knew that it had been Acuity’s pattern to buy stocks near the close of trading.” Acuity is an institutional portfolio manager which manages investment funds, including the Acuity and Clean Environment fund families.