The Ontario Securities Commission has fined Yorkton Securities and its former CEO $1 million each as part of a settlement in which OSC staff alleged that the respondents acted contrary to the public interest.

The penalties were revealed following a closed-door hearing in Toronto earlier today.

“The sanctions are sufficient to promote the public interest,” Howard Wetston, chair of the OSC panel that approved the settlements, told the hearing. “These orders are intended to restrain the inappropriate conduct of registrants that has arisen out of conflicts of interest. They serve as a strong deterrent against behaviour that undermines the integrity of our capital markets.”

Scott Paterson, who was fired from Yorkton last Friday, is also banned from securities trading for six months and barred from acting as an officer or director of a securities firm for two years.

“As part of the settlement I acknowledged that certain of my actions were contrary to the public interest,” Paterson said in a statement.

“There were no allegations or admissions of the violation of any specific provisions of securities laws,” he said.

Yorkton and Paterson must also cover the OSC’s investigation costs. Yorkton was fined an additional $200,000, while Paterson was charged an extra $100,000.

The fines were levied after the OSC alleged Paterson and a quartet of other Yorkton executives played multiple roles in several companies that Yorkton underwrote. Paterson and the others are said to have acted as early investors and executives in the companies, such as Book4golf and EcomPark, and then acted as analysts, underwriters and traders when Yorkton brought the companies to market.

Three other Yorkton executives — research director Roger Dent, Nelson Smith, the company’s head of investment banking, and investment banker Alkarim Jivraj — were fined a total of $95,000.

A settlement with a fourth Yorkton official, Piergiogio Donnini, the firm’s former head trader, has not been worked out yet. A date for a hearing for Donnini was to be set Wednesday.