Toronto-based Northern Financial Corp., which owns brokerage firm Northern Securities Inc., said Tuesday it is appealing to the Ontario Securities Commission (OSC) for a stay of sanctions handed down by an Investment Industry Regulatory Organization of Canada (IIROC) hearing panel.
Late Mondy, IIROC said that it has levied a fine of $300,000 and costs of $150,000 against the firm, a two-year registration ban on Northern’s CEO, Vic Albioni, and a permanent ban on him serving as an ultimate designated person (UDP) in the industry.
Alboini also faces $625,000 in fines, $125,000 in costs, and disgorgement, along with the registration sanctions.
The firm’s former chief compliance officer (CCO), Fred Vance, and its former chief financial officer, Douglas Chornoboy, were also hit with a total of $75,000 in fines; and they are ordered to pay $65,000 in costs.
Northern said that both it, and the executives, have applied to the OSC for a review of the IIROC panel’s decision. And, it said they will also be applying to the OSC for a stay of the sanctions pending its decision on the appeal. The suspensions are ordered to start 14 days from the date of the decision, and the fines are due within 30 days.
“As this matter will be reviewed by the OSC, Northern Securities believes it important to respect the regulatory process by not making any specific comments at this time on the reasons for the hearing panel’s decision and the sanctions,” the firm said today.
IIROC’s reasons and penalties in the case were handed down following a disciplinary hearing held from May 7 to June 1, this year, and a penalty hearing held October 11 and 12.
An IIROC hearing panel found that the firm and the executives contravened several IIROC rules, including risking its capital by improperly obtaining credit for a client; misstating capital; failing to correct deficiencies uncovered in compliance reviews; along with supervisory failures.
It said Alboini, in a role as the firm’s “ultimate designated person” engaged in a trading practice enabling client Jaguar Financial Corp. to obtain unapproved access to credit in 2008.
IIROC added that he and Vance, as chief compliance officer, failed to create and maintain a culture of regulatory compliance.
It also found Alboini and Vance did not ensure that the dealer “corrected deficiencies found in three business conduct compliance reviews and one trading conduct review,” and Alboini and Chornoboy, as chief financial officer allowed or filed inaccurate financial reports that failed to account for leasehold improvement costs and therefore misstating Norther Securities’ adjusted capital.
With files from the Canadian Press