The Investment Industry Regulatory Organization of Canada has suspended two Montreal brokers at RBC Dominion Securities Inc. for six months and fined them $100,000 each for their role the fraud perpetrated by Earl Jones.

RBC DS was also fined $500,000 in the settlement agreement published Monday.

Jones was convicted for defrauding more than 100 clients out of $50 million.

Following a hearing held on June 14, an IIROC accepted a settlement agreement between IIROC staff and RBC DS, Jean-Pierre Ménard and Serge Leclaire.

RBC DS and the two men admitted that between August 2003 and December 2008 they failed in their gatekeeper duty when they allowed Jones to have numerous trading authorizations for numerous unrelated clients and did not question certain withdrawals from certain accounts for which he had trading authorization.

RBC DS and the two men also agreed to pay $20,000 in costs to IIROC.

IIROC formally initiated the investigation into Ménard and Leclaire’s conduct in March 2010. The violations occurred when both were registered representative with the Montreal branch (Place Ville-Marie) of RBC DS. IIROC began investigating RBC DS in October 2010.

Ménard and Leclaire are still registered reps at the Place Ville-Marie branch of RBC DS.