Credit Suisse First Boston Canada Inc. (CSFB) today was fined $1.35 million for improperly trading more than 9 million shares of BCE off marketplace in April 2003, and for failing to maintain a complete and accurate audit trail.

As well Market Regulation Services Inc. (RS) ordered CSFB to pay $150,000 to offset the costs of the investigation.

An RS hearing panel approved the settlement agreement between RS and CSFB in which CSFB agreed that it conducted non-permitted, off-marketplace trades in BCE trades on April 16, 2003.

CSFB also agreed that it failed to complete and time stamp trade tickets in relation to the BCE transaction, which resulted in an incomplete audit trail of the transactions.

In a statement, RS said the acquisition of the 9 million BCE shares through London, England was not reported to a marketplace, stock exchange or organized regulated market that publicly disseminates details of trades in the market. CSFB also conducted the unwinding trades, or sales of the BCE shares to Canadian clients, in the OTC market in the United States outside market hours, knowing that the details would not be disseminated in real time.

“The manner in which the take-on and the unwinding trades were conducted harmed the integrity and the efficiency of the capital markets,” said Maureen Jensen, vp market regulation – eastern region at RS. “CSFB conducted these trades off a marketplace in a totally non-transparent way to reduce the risk of trading interference, knowing that there would be no public dissemination of the trading details on a consolidated tape. By depriving the market of the trading details, CSFB in effect prevented other market participants from having a level playing field.”