OSC issues $1M in penalties to firm, executives for spoofing

The OSC has fined a firm $400,000 and two executives $550,000 and $20,000, respectively, for quote manipulation, known as spoofing. The firm must also pay costs of $30,000.

From October 2016 to December 2016, the president of Toronto-based fund manager K2 & Associates Investment Management Inc. and one of the firm’s traders engaged in about 60 incidents of spoofing, which allowed them to profit by about $250,000 from artificial prices, says the OSC’s settlement agreement.

During that time, Shawn Kimel was president, ultimate designated person and chief compliance officer of K2, a firm he also founded.

The agreement notes that Kimel and trader Daniel Gosselin cooperated with OSC staff in the investigation, and that there was no harm to retail investors. The firm appointed a new chief compliance officer and ultimate designated person, and Kimel and Gosselin were required to take additional training as part of an internal disciplinary process that included sanctions, the agreement says.

In addition to the $550,000 fine, Kimel is banned from acting as chief compliance officer or ultimate designated person for 10 years and from securities trading for nine months. Gosselin was fined $20,000 and is banned from acting as chief compliance officer or ultimate designated person for five years and from securities trading for six months.

Gosselin is now K2’s president, while Kimel is a director.

Read the full settlement agreement.

Staff

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