Scotia Capital fined $200,000 for failure to supervise reps

On July 5, 2017, an IIROC hearing panel accepted a settlement agreement, with sanctions, between IIROC staff and Scotia Capital Inc.

Scotia Capital admitted it failed to adequately supervise two registered representatives when they recommended unsuitable securities transactions for clients. The transactions weren’t in keeping with good business practice, contrary to IIROC dealer member rules 38.1 and 2500.

The transactions involved an investment strategy to take advantage of the price difference between new issues and initial public offerings, and the price on the secondary market.

Pursuant to the settlement agreement, Scotia Capital agreed to the following penalties:

• a fine of $200,000 and
• amounts disgorged from the supervisor in the amount of $100,000, which will be donated by Scotia Capital to charity.

Scotia Capital also agreed to pay costs of $20,000.

The settlement agreement says a mitigating factor in the case is $2,501,729 in compensation that Scotia Capital paid to affected clients.

Read the full settlement agreement.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.