Bank brokerages agree to pay $500,000 penalties for breaking trading rules

TORONTO — Investment firms owned by three of Canada’s biggest banks have each agreed to pay a half-million-dollar penalty to settle charges of improperly trading shares.

The Investment Industry Regulatory Organization of Canada or IIROC says a hearing panel has accepted a settlement whereby RBC Dominion Securities, Scotia Capital Inc. and TD Securities Inc. will each pay a $500,000 penalty — plus costs of $10,000 each — to settle charges they traded in a security by means other than the entry of an order on a marketplace.

In an agreed statement, IIROC says the three Canadian firms chose to join lead underwriter Goldman Sachs & Co. LLC in May 2018 to help Royal Dutch Shell sell 97.6 million shares in Canadian Natural Resources Ltd.

Goldman Sachs was to acquire the shares under U.S. securities law on a “bought deal basis,” which meant the shares would be sold at a specified discount from the closing market price. Each member of the underwriting consortium agreed to market one quarter of the shares, with Goldman Sachs responsible for settling the trades and making the required U.S. regulatory disclosures.

However, Goldman Sachs discovered it was not in a position to deliver the shares to certain Canadian institutions which did not have accounts or required currency conversion and instead forwarded those shares to the three Canadian firms to settle the trades with their clients.

IIROC says those trades should have been entered in a marketplace unless they were covered by an exemption, thus violating a measure designed to increase visibility in the marketplace. It said the largely technical violation didn’t cause any harm to clients.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

More choices now available for office locations in Red Deer

Depending on size, offices can locate in different city commercial zones

Painting of slain Red Deer doctor and his family is a reminder ‘we care’

Remembering the family of the late Dr. Walter Reynolds

COVID-19: More than 1 million Albertans have been tested to date

Roughly one in four Albertans have been tested

QUIZ: Do you know what’s on TV?

Fall is normally the time when new television shows are released

David Marsden: Molly Banister extension must be kept

‘It would be a mistake to take a sensible response to future residential development off the table’

Bubble hockey champs: Tampa Bay Lightning beat Dallas Stars 2-0, win Stanley Cup

Bubble hockey champs: Tampa Bay Lightning beat Dallas Stars 2-0, win Stanley Cup

Mahomes outplays Jackson to lead Chiefs past Ravens 34-20

Mahomes outplays Jackson to lead Chiefs past Ravens 34-20

The Finals are set: LeBron, Lakers will meet Butler, Heat

The Finals are set: LeBron, Lakers will meet Butler, Heat

Canadian Leylah Annie Fernandez upsets No. 31 seed at French Open

Canadian Leylah Annie Fernandez upsets No. 31 seed at French Open

Blue Jays to start Shoemaker in Game 1 against Rays, Ryu on tap in Game 2

Blue Jays to start Shoemaker in Game 1 against Rays, Ryu on tap in Game 2

Canadian men drawn with rival Americans in Group B at 2021 Gold Cup

Canadian men drawn with rival Americans in Group B at 2021 Gold Cup

Adesanya defends belt, Blachowicz wins title at UFC 253

Adesanya defends belt, Blachowicz wins title at UFC 253

Most Read