A hearing panel of the Investment Dealers Association of Canada has imposed discipline penalties on Roger Racine, at all material times manager of the Laval branch of Scotia Capital Inc.
Following a settlement hearing held on June 7, the pane considered, reviewed and accepted a settlement agreement between IDA staff and Racine. Under the terms of the Agreement, Racine admitted that between April 2002 and December 2003 he:
- failed to use due diligence in his supervisory capacity to learn the essential facts relative to every client and every account accepted when approving new options accounts for seven clients, as well as changes in their investment objectives and risk tolerances;
- failed to exercise adequate supervision of transactions effected by a representative under his supervision in the options accounts of eight clients without ensuring the appropriateness of the trades, and had authorized modifications to the options strategies used in the accounts;and
- failed to question or verify that the representative had met the firm’s requirements for prior authorizations to execute trade strategies, as applicable, prior to the registration of large numbers of contracts.
The IDA fined Racine $30,000 and $5,000 in costs; suspended from his registration as Branch Manager for six months; and as a condition of re-approval, he must successfully re-write and pass the Branch Managers Course and Options Supervisors Course.
Racine remains employed at Scotia as a registered representative.
For a complete summary of facts, please see IDA Bulletin 3565.