A Winnipeg-based firm and its director are facing a less severe set of penalties from the Manitoba Securities Commission (MSC) after appealing penalties imposed last year by the Investment Industry Regulatory Organization of Canada (IIROC).

On Friday, IIROC issued an appeal decision in the case of dealer Jory Capital Inc. and its CEO, president and sole director, Patrick Michael Cooney. Jory and Cooney had sought to appeal IIROC’s penalty decision from January 2011, and two subsequent decisions regarding enhanced business restrictions.

IIROC announces penalties against Jory Capital, firm’s CEO

IIROC had issued Cooney a $100,000 fine, costs of $40,000 and a permanent ban from registration in all capacities with IIROC, with the exception of registered representative, investment representative or trader. Jory Capital was ordered to pay a $120,000 fine, to retain a compliance consultant for at least one year, and to pay $10,000 in costs.

In addition, Jory faced enhanced business restrictions which prohibited the firm from opening any new branch offices, hiring any new registered representatives or investment representatives, opening any new customer accounts or changing its inventory position in any material respect.

The penalties came after the regulator found that Jory and Cooney violated IIROC rules and the Universal Market Integrity Rules. It found that Cooney failed to take measures to ensure the firm met compliance standards with regard to the monitoring of regulatory capital and the reliability of financial reporting; and that Jory failed to maintain adequate risk adjusted capital.

The violations occurred between 2005 and 2009 when Cooney was registered as director with the Winnipeg office of Jory. Cooney continues to be registered at the same office.

Following an MSC appeal hearing held on April 30th, the Manitoba regulator issued a decision imposing a new, less severe set of penalties against Jory and Cooney. Under the new order, Jory no longer faces a fine, but must pay costs of $50,000, while Cooney still faces a fine of $100,000, but is not required to pay any costs.

Similar to IIROC’s order, the MSC ordered that Cooney will be prohibited from being approved in any IIROC approval category, but with a broader set of exceptions, including registered representative, investment representative, executive and director, or any equivalent registration categories under the Manitoba Securities Act.

The regulator also ordered that Jory’s registration be subject to the following terms and conditions:

  • Jory must establish and maintain an independent advisory committee;
  • Jory must engage the services of a qualified external compliance consultant acceptable to IIROC staff to conduct an independent review of the firm’s compliance and supervision policies and procedures and to provide comprehensive recommendations for ongoing compliance practices; and
  • until an ultimate designated person (UDP) and a chief compliance officer (CCO) have been approved for Jory by IIROC, the compliance consultant shall, in conjunction with Jory’s operations manager, perform the functions that would be performed by the UDP and CCO.


Jory’s registration will be cancelled if the company fails to engage or maintain the committee, ceases to have a carrying broker, ceases to use the services of a compliance consultant acceptable to IIROC staff, or if its risk adjusted capital is negative and is not restored to a positive value within five business days.

The MSC also removed the enhanced business restrictions facing Jory, as long as the firm secures a capital injection of $200,000 and engages the required external compliance consultant.