On April 15, 2014, a hearing panel of IIROC accepted a settlement agreement between IIROC staff and Toll Cross Securities Inc. (“TCSI”).
TCSI admitted to conduct involving its failure to comply with research analyst trading restrictions and research disclosure requirements.
IIROC formally initiated the investigation into TCSI’s conduct in November 2011. The conduct occurred at TCSI’s head office in Toronto, Ontario. TCSI is an IIROC-regulated firm.
Specifically, TCSI admitted that from March 2010 to March 2013, it violated Dealer Member Rule 3400 in that:
- It permitted a research analyst to trade during the research quiet period and against the analyst’s current recommendation without prior written approval, some of which transactions occured at another dealer member;
- It issues research reports which contained inaccurate disclosure of information relating to potential conflicts of interest;
- The disclosure of its system for rating investment opportunities and the percentage of its recommendations which fell into each category was significantly outdated.
Pursuant to the settlement agreement, TCSI agreed to a fine of $15,000 and to pay $5,000 in costs.
Read the settlement agreement.
Also read: New rules to slow high-frequency traders