Market Regulation Services Inc. has fined Canaccord Capital Corp. $50,000 for failing to supervise employee Kai Tolpinrud.

The panel has requested additional submissions on matters relating to a settlement with Tolpinrud.

Canaccord admitted that between March 2001 and March 2002, Tolpinrud committed numerous infractions including frontrunning, taking advantage of client orders, and making a practice of trading opposite his clients, in relation to trading in securities on the Canadian Venture Exchange Inc. and the Toronto Stock Exchange.

Canaccord further admitted that failed to properly supervise the trading activities of Tolpinrud, and failed to ensure that he complied with the requirements of the CDNX and TSE

As well, Canaccord permitted Tolpinrud, who was not approved by the TSE for access to the equities market as an approved trader, to enter orders and trade listed securities.

Pursuant to the terms of the settlement agreement, Canaccord was fined $50,000. As well, the firm must undertake a review of trading by Tolpinrud for the period Jan. 1, 2000 to Mar 11, 2002 to identify violative trades by Tolpinrud and complete such review by Feb 1, 2004.

Canaccord must make disgorgement to any client identified in the review (and not already compensated); and prepare and submit, by Mar 1, 2004, a report to the satisfaction of RS on the review and disgorgement.

The firm also agreed to comply with record-keeping and audit trail requirements, authorized or approved trader requirements for markets regulated by RS.

Canaccord must also document steps taken to ensure compliance with all aspects of record-keeping, audit trail, and authorized or approved trader requirements, and provide to RS, monthly internal reviews of trade ticket audit trail and record-keeping/

As well, as part of the settlement, Canacdord must retain an independent consultant to review its policies and supervisory systems to prevent and detect violations of frontrunning, conflict of interest and client priority requirements. It must implement the recommendations of the review process; and prepare and submit, by April 1, 2004, a report to the satisfaction of RS on the review and implementation of new or additional policies.

Canacorrd was also ordered to pay $43,000 to cover the cost of the investigation.