The Canadian Investment Regulatory Organization (CIRO) recently announced reasons for its decision to accept a settlement between the regulator’s hearing panel and Kamal Lidder, who worked at a Vancouver branch of BMO Nesbitt Burns until fall of 2019.
The decision states that in February 2018 Lidder designed an investment strategy whereby he would pick one large cap stock at the beginning of the week and sell it at the end of the week.
To promote said strategy, he independently designed marketing and sales materials to be distributed among clients. According to the CIRO hearing panel, Lidder did so without approval from BMO.
The hearing panel details state that Lidder would email participating clients at the beginning of each week but would not always follow up to obtain specific instructions from those clients, nor did he get written permission to transact for them.
However, between February 2018 and April 2019, Lidder went on to make discretionary trades for 22 client accounts across approximately 15 separate households.
CIRO, known as The Investment Industry Regulatory Organization of Canada or IIROC at that time, subsequently sanctioned Lidder for the two contraventions. The regulator also levied a fine of $15,000 and $2,000 in costs. CIRO made the details public most recently in duplicate announcements on both August 11 and August 15, 2023.