Scotia Capital Inc. agreed to a $65,000 penalty for trading in securities that were subject to cease trade orders (CTOs) and, in one instance, a trading halt.
In a settlement agreement with the British Columbia Securities Commission (BCSC), Scotia admits that it made trades in the securities of 14 companies that were the subject to CTOs, and a halt order, between August 2006 and June 2012.
The firm acknowledged that it received notification of the cease trade orders, but that its online brokerage division, including online firms it acquired (Trade Freedom Securities Inc., which Scotia acquired in 2007, and E*TRADE Canada Securities Corp., which Scotia acquired in 2008) failed to identify and block execution of certain trades for a variety of reasons. It attributes these failures to “the company’s back office conversion, technological error, human error and stock symbols/name changes.”
According to the agreement, Scotia self-reported many of the breaches, and co-operated with BCSC staff in their investigation. It also notes that Scotia says it has taken corrective action to prevent similar breaches from occurring in the future.
The agreement also notes that E*TRADE has previously settled with the BCSC over similar breaches in December 2001 and December 2008 (before Scotia acquired the firm).