compliance-regulation

On August 31, an IIROC hearing panel accepted a settlement agreement, with sanctions, between IIROC staff and D&D Securities Inc. (now known as Dominick Inc.) (“D&D”), and Patrick Lilly.

D&D and Lilly admitted failure to ensure compliance with certain regulatory requirements and Lilly’s failure to ensure that D&D’s representations to IIROC were fulfilled.

Specifically, D&D and Lilly admitted to the following violations:

(a) From 2011 to 2014, D&D and Lilly failed to ensure compliance with regulatory requirements with respect to (a) avoiding misuse of confidential information, (b) identifying, managing, and disclosing conflicts of interest, potential conflict of interest, and Outside Business Activities, and (c) supervising retail accounts, contrary to IIROC Dealer Members Rules 38, 18.14, and 2500 ; and
(b) From January 2012 to May 2015, Lilly engaged in business conduct that is unbecoming a registrant by failing to ensure that D&D fulfill representations made to IIROC that it would develop and improve its sales compliance program, contrary to IIROC Dealer Member Rule 29.1.

Pursuant to the Settlement Agreement, D&D and Lilly agreed to the following penalty:

(a) D&D and Mr. Lilly shall complete the Remedial Steps (described in paragraph 52 of the Settlement Agreement) by October 30, 2016, and shall report by that date on completion and execution to IIROC’s Vice-President of Enforcement, and as thereafter required by the Vice-President of Enforcement to ensure that the Remedial Steps are completed satisfactorily;

(b) Lilly shall successfully re-write the CCO examination by October 30, 2016;

(c) D&D shall pay a fine of $15,000; and

(d) Lilly shall pay a fine in the amount of $7,500.

D&D also agreed to pay costs in the amount of $5,000.

IIROC first formally initiated the investigation into D&D and Lilly’s conduct in March 2012.  D&D is an IIROC-regulated firm which is now known as Dominick Inc. The conduct occurred while Lilly was the Ultimate Designated Person and Chief Compliance Officer of D&D. Lilly continues to be registered in the same capacities at D&D.

Originally published on Advisor.ca
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