Ontario Securities Commission enforcement staff has withdrawn its enforcement proceeding against Southwest Securities Inc. The Notice of Hearing and related Statement of Allegations was issued on Sept. 15, 2000.

Staff alleged that Southwest, a member of the New York Stock Exchange and the National Association of Securities Dealers, was not registered with the OSC although it was engaged in activity that required registration.

In particular, it was alleged that Southwest was a carrying broker for the customers of Swift Trade Securities Inc., a securities dealer registered under Ontario securities laws, and that Southwest carried on the business of trading securities in Ontario as a result of contractual arrangements between Southwest and Swift Trade, and Southwest and the customers of Swift Trade.

Staff alleged that by failing to be registered, Southwest not only violated the Act, but also deprived the customers of Swift Trade of the protection associated with registration. No allegations were raised against Swift Trade.

Since the issuance of the Notice of Hearing, Swift Trade has restructured its Ontario operations. Swift Trade acquired a member-firm of the Investment Dealers Association of Canada with the approval of the IDA and the Commission, and transferred all of its customers and their accounts, with their consent, to the IDA member which clears its trades through an IDA member clearing broker. As a result of the re-structuring, Staff of the Enforcement Branch is withdrawing the Notice of Hearing.