The Canadian Investment Regulatory Organization (CIRO) published a decision in late 2023, wherein it announced it has accepted a settlement agreement with Leede Jones Gable Inc., after the firm failed to supervise a registered representative flagged by the Financial Transactions and Reports Analysis Centre of Canada, also known as FINTRAC.
In the settlement agreement between Leede Jones Gable and the regulator, the firm agrees it failed to adequately supervise the activities of Larry Martin, himself sanctioned in November 2021.
Between November 2016 and April 2022, the firm also agreed it failed to have adequate policies to ensure compliance with their obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Between August and December 2017, it also participated in trades by means other than the entry of an order on a marketplace.
“Leede failed to adequately supervise Larry Martin, a registered representative, by failing to adequately address the red flags associated with five investment accounts,” they write, adding that FINTRAC also identified a deficiency with Leede’s compliance which it failed to rectify until April 2022. “Finally, on four occasions Leede permitted the transfer of shares from accounts at Leede to unrelated third-party accounts at Leede. By doing so, Leede failed to comply with the requirement to enter trades in a security on a marketplace,” the settlement agreement states.
The firm has since hired additional compliance staff and implemented new systems to better track and monitor trading. The FINTRAC review did not find any evidence of money laundering or terrorist financing activity.
Under the terms of the settlement agreement the firm agreed to pay a fine in the amount of $150,000 and costs totalling $15,000.