A hearing panel in Toronto today approved a settlement agreement between Market Regulation Services Inc. (RS) and Scotia Capital Inc. In the settlement, Scotia Capital agreed that it is liable for contraventions of trading rules by its former employees.
During the period April 4, 2002 to April 18, 2005, David Berry, then head of preferred trading at Scotia Capital and his assistant, Marc McQuillen, operated outside of the normal syndication practices in relation to new issues for which Scotia was a member of the underwriting syndicate.
The two men solicited client buy orders from their clients during the distribution period at the distribution price. Then, on or about the first day of trading, they conducted off-marketplace trades in the newly listed shares by selling them to clients, largely from a short position, from their inventory account. These short positions were subsequently covered in the market, usually at a profit.
Scotia Capital was fined $571,167.00 representing the financial benefit to it from the conduct described in the statement of allegations, plus $67,000 in costs.
“We are pleased that Scotia Capital recognized in this settlement that, even though supervision was not an issue, it would not be appropriate to retain profits generated by the wrongdoing of its employees,” said Maureen Jensen, vp market regulation, eastern region.
Details of the settlement can be found on RS’s website at www.rs.ca.
Scotia Capital agrees to settlement with RS
Not appropriate for dealer to retain profits generated by the wrongdoing of its employees
- By: IE Staff
- February 26, 2007 February 26, 2007
- 15:30