(April 23 – 09:15 ET) – RBC Dominion Securities Inc. has suspended one of its M&A pros as a result of its investigation into possible illegal insider trading at the firm.

On April 4, DS announced an investigation of certain suspicious trading activities. Today it says, “As a result of this investigation, the firm has suspended without pay Andrew Rankin, a managing director in the mergers and acquisitions department. RBC Dominion Securities is continuing to cooperate fully with regulatory authorities and will have no further comment until the investigation has been completed.”

Earlier, DS said it has hired forensic accounting and securities investigation firm, Kroll Lindquist Avey, to help it investigate possible illegal insider trading in offshore client accounts. DS says the shady trading seems to related to M&A transactions, in most of which RBC DS acted as an advisor.

DS says it immediately notified the Ontario Securities Commission, the Toronto Stock Exchange and the Investment Dealers Association, “to alert them to the situation and to seek their assistance in conducting a full-scale and comprehensive investigation”. Royal Bank also notified the Office of the Superintendent of Financial Institutions and DS hired Kroll.

In certain cases, primarily in the U.S., investment bankers have been accused of tipping clients to impending M&A activity, allowing profitable trading. In most deals, the target firm will see its stock jump sharply after a deal is announced, while the acquiring firm will often see its price fall. Advance knowledge of a deal makes for easy pickings for unscrupulous traders.