A hearing panel of the Investment Dealers Association of Canada fined MGI Securities Inc. and Crawford Gordon, the firm’s president and CEO for failing to supervise trading by clients.

Following a hearing held on May 10, the panel accepted a settlement agreement negotiated IDA staff, MGI and Gordon. Both MGI and Gordon admitted that, commencing in April 2000, they failed to establish and maintain procedures and controls to effectively supervise trading by clients who were insiders of public issuers or were in control positions of public issuers.

The panel issued a $250,000 to MGI, a $150,000 tine to Gordon, and ordered them to pay $45,000 in costs.

In addition, although Gordon continued in his capacity as president of MGI, he has undertaken to never again apply for approval for any position with supervisory compliance responsibilities.

The pane was satisfied that no illegal insider trading resulted from the MGI and Gordon’s failure. Therefore, there was no harm to clients or the integrity of the capital markets. However, the panel noted that the sanctions and costs proposed in the settlment were significant and reflected their concerns about the risk of harm that may be caused by insider trading.

For a complete summary of facts, please see IDA Bulletin 3545.