IIROC sanctions futures firm for supervisory failures

Futures brokerage firm R. J. O’Brien & Associates Canada Inc. has settled allegations that it failed to supervise a former representative at the firm who was disciplined for implementing an unsuitable high-risk trading strategy that resulted in client losses.

A hearing panel of the Investment Industry Regulatory Organization of Canada (IIROC) approved a settlement with R. J. O’Brien, which admitted to failing to supervise the former rep and failing to maintain adequate records of its supervisory efforts between February 2016 and February 2018.

In January 2022, an IIROC hearing panel imposed sanctions on former R. J. O’Brien rep Yonathan Chanoch Shields after finding he violated IIROC rules by failing to know nine clients and adopting a high-risk futures trading strategy with those clients that ultimately resulted in the clients losing US$1.2 million.

The panel fined Shields $40,000, ordered disgorgement of $64,054, and imposed costs of $35,000, along with other sanctions.

Now, the self-regulatory organization has settled with the firm for failing to properly oversee Shields.

Under the settlement, the firm agreed to pay a fine of $90,000 and costs of $10,000.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.