Rada participated in off book transactions without the knowledge or consent of his firm, issued a personal cheque from a closed account, and failed to. It is an activity that is not permitted on most major exchanges. Iiroc also takes the position that dealers supervision obligations extend to off book assets the recent crm2 amendments require reporting on such assets in certain circumstances. Staff of the investment industry regulatory organization of canada.
A disciplinary panel held a hearing at which the ia did not participate and concluded he had breached a number of iiroc rules as a result of his off book transactions, and that he had deprived the dealer of the ability to properly supervise him by conducting business over personal email. Not applicable as off book mutual fund transactions were in client name only. Enforcement notice decision in the matter of richard. The report, intended to help dealers comply with regulatory expectations, outlines common deficiencies found in iiroc staffs compliance examinations in the last year, and also sets out iiroc s examination priorities for the current fiscal year. However, this decision provides some comfort to dealeremployers that they may be insulated from liability for off book investments. A former portfolio manager has been found guilty of facilitating off book transactions, accepting undeclared remuneration from issuers, failing to disclose a conflict of interest, and deleting email records to conceal his clandestine dealings. Several dozen firms have received exemptions from the requirement to include off book positions in their annual performance reporting to clients, according to an investment industry regulatory organization of canada iiroc notice published on friday. Iiroc eyes outside business activity advisors edge. A hearing panel of the investment industry regulatory organization of canada iiroc has suspended and fined a toronto advisor for off book transactions, unauthorized and discretionary trades, and unsuitable recommendations, the selfregulatory organization said wednesday in a release.
Iiroc dealer member plain language rule book implementation. Tdb joint venture tdbjv, a private group unrelated to td, was an investment club. Inappropriate personal financial dealings, discretionary trading and off book transactions also garnered a number of prosecutions. You can also ask a desjardins online brokerage representative for the brochure why. Iiroc suspends advisor for trading violations and suitability failures. On june 1, 2008, iiroc consolidated the regulatory and enforcement functions of the investment dealers association of canada and market regulation services inc.
B2bs relationship with iforum was never disclosed to iiroc. Advisor made off book transaction and failed to inform her firm of outside business activities. Poirier facilitated a clients investment in a private placement, an off. Iiroc bans and orders former registrant to pay almost. Iiroc also takes the position that dealers supervision obligations extend to offbook assets the recent crm2 amendments require reporting on. A cross trade is a practice where buy and sell orders for the same asset are offset without recording the trade on the exchange. Effecting 111 option transactions in 23 client accounts which were outside the accounts approved option level, contrary to iiroc rule 0. Iiac response to iiroc debt securities transaction reporting. According to the oscs notice, marek is appealing the iiroc panels finding and.
By acting on behalf of tdbi with respect to the foregoing off book transactions, the respondent contravened the td compliance manual and association bylaw 29. In the agreement, rada admitted he violated iiroc rules through his participation in various off book transactions without the knowledge or consent of his firm, issued a personal cheque from a closed account and failed to cooperate with iiroc s investigation. The panels decision and reasons will be made available at. The investment industry regulatory organization of canada iiroc is the. The panel said that the unauthorized and discretionary trading, along with the off book transactions, were deliberate and intentional. Investment industry regulatory organization of canada iiroc. Enforcement notice decision iiroc hearing panel orders fines. Interpretation bulletin c93 prior to september 1, 1996, for which member firms. The only exemptions are those obtained as described in paragraph 3. On or about february 2012, earl marek facilitated off book transactions for two clients without the knowledge or approval of his member firm, contrary to iiroc dealer member rule 29.
Desjardins securities is a member of the investment. The advisors defence was based on wrongful dismissal, but the court accepted that the dealer had proven the advisor had breached the agreement by. In order to enhance our surveillance capacity, the proposed amendments would also require a unique identifier for each client of a foreign dealer equivalent whose orders are both. After the advisor was disciplined by iiroc, the dealer sued him for the loans balance. Rule 200 minimum records investment industry regulatory. All mutual fund transactions that were offbook as defined in ida compliance. Cipf provides limited protection for investors assets if an investment dealer that. The investment industry regulatory organization of canada is the national selfregulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in canada. Iiroc report highlights enforcement activity for 20. Know the risks of dealer loan agreements investment. Regulators have become very concerned about off book business, and other forms of outside business activity in the wake of the financial crisis and the earl jones scandal, which saw a nonregistered person holding out as an advisor and alleging to conduct transactions on behalf of advisors. The term offbook transactions in this bulletin refers to any securities related transaction by a provincial securities registrant on behalf of its.
Iiroc lets some dealers omit offbook assets from client. The regulatory violations most prosecuted against individuals related to due diligence, handling of client accounts and suitability. A hearing panel of the investment industry regulatory organization of canada iiroc has suspended and fined a toronto advisor for offbook. Iiroc settles with konstantinos georgeos arapis advisor.
Iiroc also takes the position that dealers supervision obligations extend to off book assets the recent crm2 amendments require reporting on. Iiroc notice 180052 proposed amendments to transaction. Iiroc notice 180122 rules notice request for comment publication of proposed provisions respecting client identifiers 2 an account number. Marek facilitated off book transactions for two clients without the knowledge or approval of his member firm, contrary to iiroc dealer member rule 29. Publication of proposed provisions respecting client. The requirements for off book transactions are referred in paragraph 2 relating to compliance, account opening, confirmations and statements. The report outlines a lot of data, and very specific cases where the iiroc has prosecuted their members. This topdown approach, which each of iiroc s compliance.
Dont make these common compliance mistakes advisors edge. Toronto, april 1, 2019 cnw a hearing panel of the investment industry regulatory organization of canada iiroc found that joseph debus recommended off book transactions, effected unauthorized. Off book transactions 0 2 5 1 3 trading order violation 0 0 0 1 2 trading without appropriate registration 0 0 1 1 2 fraud 0 0 2 0 0 undisclosed conflict of interest 1 0 0 0 0 inadequate books and records 0 2 1 0 0 2015 2014 20 2012 2011 supervision 8 5 5 10 9 expedited hearing firm winding down 3 4 1 3 0 failure to handle client accounts. Iiroc notice 190179 rules notice notice of approval implementation dmr amendments respecting client identifiers for reportable debt transactions october 17, 2019. All member firms are required by sro rules and provincial securities acts to.
Specifically, noronha was found to have engaged in off book transactions, accepted remuneration from issuers, failed to disclose a conflict of interest and deleted email records. Iiroc enforcement staff and the respondent, todd stefiuk, consent and agree to the. Iiroc notice 190160 rules notice technical notice umir and dmr information on the implementation of client identifier amendments september 6, 2019. Effecting this transaction off book and without his firms knowledge, and receiving remuneration directly from the company, contrary to iiroc rule 18. These securities transactions were conducted off the books of mgi and were not settled through the mgi back office. In other words, an order directed to a foreign affiliate by the participant or any other person subject to rule 6. Former rep asks osc to appeal iiroc penalty investment. When the advisors off book transactions came under investigation, the dealer ended the agreement. August 28, 1996 3 c106 registered in registered in nominee name client name b. Ultimately, iiroc conducted 200 investigations in 20 across canada.
The previously issued bulletins referred only to mutual fund transactions because the practice of conducting such transactions off book was gaining momentum as way of doing mutual fund business. The investment industry regulatory organization of canada last month released its annual compliance report for 2012. Enforcement notice decision iiroc hearing panel finds. An offbook transaction is an incomplete record where any part of the trade cycle.
On october 31 st, the iiroc published their enforcement report 2015 outlining the complaints they receive as the industry watchdog from customers you complain here. This was considered off book, or illegal, transactions by the iiroc. Iiroc announces disciplinary hearing for marcel anil rada. Radas violations included off book transactions, issuing personal. A hearing panel of the investment industry regulatory organization of canada iiroc accepted a settlement agreement. This item is part of stockwatchs value added news feed and is only available to stockwatch subscribers. Earlier this week, the investment industry regulatory organization of canada released its enforcement report for 20, which covers iiroc s enforcement activities and key policy initiatives for last year.
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