On October 11, 2012, a hearing panel of the Investment Industry Regulatory Organization of Canada (IIROC) accepted a settlement agreement, with sanctions, between IIROC staff and Samuel Ryan Scoten.
Scoten admitted he solicited and facilitated the purchase of shares without his employer’s consent, he engaged in discretionary trading, and that he provided IIROC staff with information that he knew or ought to have known was false.
Specifically, Scoten admitted to the following violation(s):
a) Between 2007 and 2009, he solicited and facilitated the purchase of previously issued shares of Asian Coast Development (Canada) Ltd. (ACDL) by some of his clients, without the knowledge or consent of his employer, contrary to Dealer Member Rule 29.1 (prior to June 1, 2008, IDA By-law 29.1).
b) Between 2008 and 2010, he received compensation for his facilitation of his clients’ purchase of previously issued ACDL shares, without his employer’s knowledge or consent, contrary to Dealer Member Rule 29.1 (prior to June 1, 2008, IDA By-law 29.1).
c) In April 2010, he placed discretionary trades for client accounts even though they had not been designated as being discretionary accounts by his employer, contrary to Dealer Member Rules 1300.4 and 1300.5.
d) In June 2011, he informed IIROC staff that he had not received any compensation for the purchase of previously issued ACDL shares by some of his clients and that he only placed discretionary trades on behalf of two accounts on April 1, 2010, which he knew or ought to have known was false, contrary to IIROC Dealer Member Rule 29.1.
Pursuant to the settlement agreement, Scoten agreed to the following penalties:
a) A three-year prohibition from approval in any capacity;
b) That he successfully complete the Conduct and Practices Handbook Course prior to being eligible for approval in any capacity;
c) Upon re-approval, a one-year period of strict supervision; and
d) A $50,000 fine to IIROC.
Scoten also agreed to pay costs in the amount of $5,000.