An Investment Industry Regulatory Organization of Canada (IIROC) hearing panel approved a settlement agreement with brokerage firm Jitney Trade Inc., which admitted to failing to supervise a direct access client that repeatedly engaged in potentially manipulative trading.
As part of the settlement between Jitney Trade and IIROC staff, the firm agreed to pay a fine of $200,000, costs of $25,000 and to implement remedial measures upgrading its oversight capabilities.
Jitney Trade admitted that it “failed to implement an effective trading supervision system and failed to act as a gatekeeper to prevent and detect violations or potential violations … by one of its direct electronic access clients, Oasis World Trading Inc.,” according to the settlement.
These supervisory failures “allowed Oasis to repeatedly engage in manipulative trading,” such as ‘spoofing’ or ‘layering’, the settlement notes. Yet, it says that “JitneyTrade did not take any heightened measures to supervise Oasis’ trading,” nor did the firm investigate whether its system was properly generating alerts for potentially manipulative activity.
In December 2015, the Ontario Securities Commission (OSC) found that between November 2013 and December 2014, Oasis had engaged in manipulative trading. The firm settled the allegations, agreeing to an administrative penalty of $225,000 and costs of $75,000, among other sanctions.