Desjardins Securities Inc., its president and a former chief compliance officer were today fined a total of $1.96 million by Market Regulation Services Inc. after an RS Hearing Panel in Montreal approved a settlement agreement for violating certain of the trading rules from 2002 to 2004.

Desjardins Securities was fined $1.5 million for failing to comply with its trading compliance and supervision obligations, as well as for multiple counts of failing to record client consent to trade alongside on a client order ticket and failing to properly complete the client trade ticket.

Jean-Pierre de Montigny, the firm’s president & COO, was fined $300,000 for failing to comply with his trading supervision obligations.

Jean-Luc Brunet, a former chief compliance officer at, was fined $35,000 for failing to comply with his trading compliance obligations.

Desjardins Securities was also ordered to pay RS $125,000 for costs.

According to RS, the violations occurred between November 2002 to August 2004 as the firm was expanding, particularly its institutional trading business. RS audits of trade desk operations in 2002, 2003 and 2004 found that the firm had insufficient supervision of trading practices and procedures and Universal Market Integrity Rules deficiencies, most notably related to audit trail violations.

“A culture of compliance begins at the top,” said Maureen Jensen, vice president, market regulation, eastern region at RS. “At [Desjardins Securities], the continued lack of daily testing and the other compliance and supervisory failings were the result of a culture within the firm that did not place importance on having effective trading supervision and compliance systems. These systems are essential for market integrity.”

“The ultimate responsibility for the firm’s consistently worsening compliance and supervision issues between November 2002 and April 2004 rests with the president and COO,” said Jensen. “That these issues were allowed to deteriorate as they did is evidence of the President’s failure to fulfill his trading supervision obligations as stipulated in the trading rules.”

“Without wanting to diminish the significance of the criticisms against us and that we regret, it is particularly important to note that the violations in question did not cause any harm to Desjardins Securities customers, as RS’s investigation demonstrated. No financial losses were suffered and neither Desjardins Securities or any of its employees gained financially from the situation,” said Desjardins Securities in a statement.