A hearing panel of the Investment Dealers Association of Canada has found Chak (Jason) Ng, at the relevant time a registered representative at the Toronto York Street branch of HSBC Securities (Canada) Inc., guilty of unknowingly facilitating a market manipulation in the stock of Pender International Inc.

The panel also found that Ng took instructions for various accounts from Michael Mitton, the perpetrator of the manipulation, notwithstanding that Mitton had no trading authorization over those accounts.

The panel also stayed a charge that Ng had violated Regulation 1300.1(a) because it determined that offence to be included in manipulation of Pender stock.

In October 2004, Ng was introduced to an individual at the offices of Trillion Financial Group, a financial services company, who opened an account with him. This individual introduced him to a number of other individuals who also opened accounts with Ng. For seven of the 10 accounts opened, the only stock traded in the accounts was Pender’s stock. Between October 20 and November 22, 2004, these accounts made up a significant portion of the buying activity in Pender’s stock and were part of the manipulation carried out by Mitton. Ng did not question this activity until he was directed to do so by his employer’s compliance department. Mitton was criminally charged with fraud and money laundering with respect to the manipulation of Pender and was ultimately sentenced to seven years on the fraud charge and to three years on the money laundering charge.

The panel found that while Ng did not know of the manipulation, his conduct “amounted to gross negligence, which clearly amounts to conduct unbecoming.”

Ng is currently employed with Research Capital Corp.

The penalties imposed against Ng will be determined at a penalty hearing to be set at a future date.

IDA staff thanked the Ontario Securities Commission, Integrated Markets Enforcement Team and the U.S. Securities and Exchange Commission for their assistance in this matter.