IIROC Sanctions BMO Nesbitt Burns Inc.

22-0162
Type: Enforcement Notice> Decision

Contact:

Richard Korble
Vice-President, Western Canada
Telephone:
Email:
Julia Mackenzie
Public Affairs Specialist
Telephone:
Email:

October 13, 2022 (Vancouver, British Columbia) – On October 4, 2022, a Hearing Panel of the Investment Industry Regulatory Organization of Canada (IIROC) accepted a Settlement Agreement, with sanctions, between IIROC staff and BMO Nesbitt Burns Inc. (“BMO NBI”).

BMO NBI admitted to violating IIROC Rules 38.1 and 2500 by failing to adequately supervise the activities of an RR in relation to two client accounts that involved high new issue commissions and high turnover ratios which should have raised suitability and conflict of interest concerns.

Specifically, BMO NBI admitted to the following violation:

  1. Between January 2011 and March 31, 2017, BMO NBI failed to adequately supervise the activities of an RR in relation to the Accounts both on the tier 1 and tier 2 compliance levels contrary to Dealer Member Rules 38.1 and 2500.

Pursuant to the Settlement Agreement, BMO NBI agreed to the following penalty:

  1. a fine in the amount of $125,000.

BMO NBI also agreed to pay costs in the amount of $15,000.

The Settlement Agreement is available at:

BMO Nesbitt Burns Inc. – Settlement Agreement

The Hearing Panel’s decision will be made available at www.iiroc.ca.

IIROC formally initiated the investigation into BMO NBI’s conduct in January 2019. BMO NBI is an IIROC regulated firm.

* * *

All information about disciplinary proceedings relating to current and former member firms is available in the Enforcement section of the IIROC website.

Background information regarding the qualifications and disciplinary history, if any, of advisors currently employed by IIROC-regulated firms is available free of charge through the IIROC AdvisorReport service. Information on how to make investment dealer, advisor or marketplace-related complaints is available by calling 1 877 442-4322.

IIROC investigates possible misconduct by its member firms and/or individual registrants. It can bring disciplinary proceedings which may result in penalties including fines, suspensions, permanent bars, expulsion from membership, or termination of rights and privileges for individuals and firms.

IIROC is the pan-Canadian self-regulatory organization that oversees all investment dealers and their trading activity in Canada's debt and equity markets. IIROC sets high quality regulatory and investment industry standards, protects investors and strengthens market integrity while supporting healthy Canadian capital markets. IIROC carries out its regulatory responsibilities through setting and enforcing rules regarding the proficiency, business and financial conduct of 174 Canadian investment dealer firms of varying sizes and business models, and their more than 32,000 registered employees. IIROC also sets and enforces market integrity rules regarding trading activity on Canadian debt and equity marketplaces. For more information, visit www.iiroc.ca.

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Other Notices associated with this Enforcement Proceeding:

MFDA and IIROC have consolidated

As of January 1, 2023 the MFDA and IIROC have come together as New Self-Regulatory Organization of Canada (New SRO).

New SRO has assumed the regulatory responsibilities of the MFDA and IIROC.

We have set up an interim website for updates and information related to the New SRO including:

  • Executive Management
  • Governance
  • New SRO Rules
  • Member Application
  • Investor Office and the Investor Advisory Panel
  • Information concerning mutual fund dealers registered in Québec
  • Complaints
  • Careers

Enforcement proceedings, membership lists, continuing education, investor education resources and any other information not set out above continue to reside on www.mfda.ca and www.iiroc.ca.