NSSC denies rep’s bid to halt disciplinary action

A rep’s bid to have a disciplinary penalty imposed by the Investment Industry Regulatory Organization of Canada (IIROC) against her stayed, pending an appeal, has been denied by the Nova Scotia Securities Commission (NSSC).

The provincial regulator ruled against Shirley Locke, a rep with Aligned Capital Partners Inc. in Bedford, N.S., who brought a motion seeking to stay the nine-month suspension ordered against her by an IIROC hearing panel.

On Aug. 8, Locke was suspended (effective July 20), fined $90,000 and ordered to pay costs of $30,000, after a self-regulatory organization (SRO) hearing panel found that she violated several IIROC rules, including KYC, suitability, and unauthorized trading violations.

According to the NSSC, she is seeking a review of the SRO panel’s decision against her by the securities commission on various grounds, including alleged errors in law by the IIROC panel and that the penalties imposed were inappropriate and unjust.

In the meantime, she also brought a motion seeking a stay of the penalty, pending the outcome of the review.

In seeking a stay, Locke argued that “she will suffer irreparable harm if the stay is not granted because a suspension will harm her practice and her ability to earn a living,” the NSSC said in its decision on the motion.

IIROC staff opposed the stay, arguing that she must prove a “real risk of disastrous consequences” if the stay is not granted; and that “the impact on Locke must be weighed against IIROC’s public interest mandate.”

The SRO argued that granting a stay “would prohibit IIROC from fulfilling its mandate to foster fair and efficient capital markets and protect the public interest. This includes enforcement proceedings to deter others from engaging in similar misconduct.”

Ultimately, the NSSC sided with the SRO, denying the stay.

“We accept that Locke will suffer consequences if the stay is not granted. However, there is no clear evidence that she will suffer irreparable harm,” it said in its decision.

It also weighed IIROC’s mandate over her need to earn a living.

“In balancing Locke’s interests against IIROC’s public interest mandate, we find that the balance of convenience weighs in favor of IIROC and its public interest mandate,” the commission decision noted.

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.