The Investment Industry Regulatory Organization of Canada (IIROC) announced on Tuesday that a hearing panel accepted a settlement agreement with Toronto-based Assante Capital Management Ltd. that will see the firm pay a $400,000 penalty and $30,000 in costs.

The sanctions stem from the regulator’s allegations that the firm failed to properly supervise a branch in Red Deer, Alta. The branch was staffed by former financial advisor Brian Malley, who has since been banned from the securities industry and separately convicted of murdering a client; his wife, Christine Malley, the branch manager, and an unregistered assistant.

Earlier this year, a jury convicted Brian Malley of first-degree murder. He was accused of sending a gift-wrapped bomb to a former client that exploded, killing her. He was sentenced to life in prison, plus two-year sentences for two other offences. Brian Malley is appealing his conviction.

In 2014, IIROC permanently banned Brian Malley and fined him $300,000 after finding that he failed to ensure his recommendations to 10 clients were suitable and that he engaged in discretionary trading in the accounts of seven of the 10 clients. Christine Malley was also permanently banned and fined $250,000 for failing to supervise her husband as the branch manager. They did not appear at the IIROC hearing or contest the allegations.

See: IIROC bans Alberta couple

Now, IIROC has settled with Assante, which admitted that it did not supervise the branch properly. According to the settlement, the firm did not make supervisory inquiries where they were required; and, in cases in which inquiries were made, “it received inadequate or questionable responses but accepted the responses as satisfactory.”

The IIROC settlement also notes that there were a number of features of the Red Deer branch that called for additional scrutiny from the firm, including the fact that the Malleys were married. It indicates that the firm was aware that the Malleys were spouses, but “failed to adequately supervise the Red Deer branch to mitigate for the potential conflict of interest.”