The Investment Dealer’s Association of Canada has accused a former broker at Global Securities Corp. in Vancouver of conducting improper trades for U.S. residents involved in an alleged Florida penny-stock scam.

The IDA said yesterday it will hold a hearing July 11 to consider allegations that Stephen Brook Toban opened 35 investment accounts for U.S. residents and conducted trades that should have raised red flags. The IDA said the transactions were “peculiar, suspicious or appeared to be consistent with market manipulation, deception or other improper market related activity.”

Toban is no longer registered with the IDA.

According to the IDA notice of hearing, the U.S. Securities and Exchange Commission launched a case in 2004 against five individuals accused of participating in a “pump and dump” stock manipulation scheme. The case involves Florida-based Nutraceutical Clinical Laboratories International Inc., whose shares traded on the over-the-counter “pink sheets” market, which is used for small companies. The people involved are alleged to have reaped improper gains of about US$1.8-million.

The IDA said Toban opened trading accounts at Global Securities in 1999 for four of the five people named in the SEC case, who subsequently traded Nutraceutical shares through the accounts. The IDA said Toban ultimately opened a total of 35 accounts for American and offshore clients who traded Nutraceutical shares.

In most of those cases, the trading followed a similar pattern, the IDA alleged. The shares were transferred into the accounts from an account controlled by two of the individuals named in the SEC case, then were subsequently sold and the proceeds removed.

In some cases, the IDA said a number of cross-trades were made in the market between the same accounts from which Nutraceutical shares had been transferred.