The Investment Industry Regulatory Organization of Canada (IIROC) announced it has accepted a settlement agreement with Laurentian Bank Securities Inc., under which Laurentian will pay a $250,000 fine, plus IIROC’s costs of $25,000. In the agreement, Laurentian admits it failed to implement and maintain adequate trading supervision systems between November 2015 and May 2018.
According to the settlement, an April 2017 review by IIROC’s trading compliance staff found that Laurentian had not corrected trading supervision deficiencies that had first been identified by IIROC staff in an earlier October 2015 assessment. IIROC requires all participants to develop and maintain policies, procedures and a system of internal controls that are reasonably designed to ensure compliance with regulatory requirements related to trading conflicts.
The settlement agreement lists at least 28 “failures to comply with trading supervisions obligations,” where internal review and trading controls were found to be inadequate or deficient during both reviews. Following its April 2017 review, IIROC sent Laurentian a report in October 2017 outlining its findings. A number of the deficiencies were addressed and corrected by the end of 2017.
When it was then determined that Laurentian would not be able to correct the remaining deficiencies without assistance, IIROC imposed a number of terms and conditions. These required Laurentian to hire a compliance consultant approved by IIROC, to prepare and implement a remedial action plan, to provide monthly progress reporting to IIROC and obtain an attestation from the consultant confirming that the deficiencies were corrected, tested, effective and in compliance with regulatory requirements. Subsequent IIROC reviews found that the remediation plan had been fully implemented and that the identified deficiencies had been corrected. IIROC removed the terms and conditions in June 2019.
