(June 21) – “Some of the country’s largest brokerage firms — most owned by the big banks — are bracing for what could be an onslaught of disciplinary action from two of Canada’s most powerful securities regulators as a result of a sweeping probe into alleged stock manipulation,” writes Theresa Tedesco in today’s National Post.
“Three of the major banks — Royal Bank of Canada, Canadian Imperial Bank of Canada and Bank of Montreal — yesterday confirmed their involvement in an extensive six-month investigation by the Ontario Securities Commission and the Toronto Stock Exchange.”
“One of the areas of examination is whether stock prices were manipulated to improve the performance of investment funds using a trading practice called ‘high closing’. The technique attempts to artificially boost the closing price of a stock at the end of the trading day and is considered by securities regulators to be a form of stock manipulation.”
“If the allegations of high-close trading practices are true, thousands of Canadian investors may have overpaid for stocks, or may find their investments are overvalued.”
“‘We’ve been contacted by the TSE for information and we provided it,’ said Ian Blair, a spokesman for the Bank of Montreal. However, Mr. Blair refused to comment further, citing ‘OSC regulations’.”
“Susan McDougall, a spokeswoman for CIBC, the country’s largest bank, confirmed ‘regulatory authorities are reviewing two stock orders executed by a CIBC World Markets employee.’ She added the bank’s head of compliance has been contacted by the regulators and is currently providing ‘requested information’.”