Another former trader at Stifel Nicolaus Canada Inc. is being sanctioned for disclosing potentially confidential information to hedge funds that then traded on that information.
On Nov. 25, a hearing panel of the Canadian Investment Regulatory Organization (CIRO) approved a settlement agreement with Jason Adam Beales, a former rep and managing director with Stifel Nicolaus in Toronto. In the settlement agreement, Beales admitted to revealing potentially confidential information about a proposed block trade to multiple hedge fund clients — one of the hedge funds then traded on that information, without his knowledge.
CIRO also settled with the firm’s former head of sales and trading for similar conduct — alerting hedge fund clients about pending block trades, information that a hedge fund then traded against.
And, in August, CIRO settled with the firm itself, which admitted to failing to properly supervise these kinds of disclosures.
Stifel Nicolaus was fined $475,000 for its failings and agreed to pay $25,000 in costs. The former head of sales and trading agreed to a $75,000 fine, a six-month suspension, to pay $5,000 in costs and to complete the Canadian Securities Institute’s Conduct and Practices Handbook (CPH) course (or equivalent) before re-entering the industry.
Under the latest settlement, Beales agreed to a $60,000 fine, a six-month suspension, to complete the CPH course and to pay $5,000 in costs to resolve the allegations.