IIROC Sanctions Scotia Capital Inc. 

21-0245
Type: Enforcement Notice> Decision

Contact:

Andrew P. Werbowski
Director, Enforcement Litigation
Telephone:
Email:
Julia Mackenzie
Public Affairs Specialist
Telephone:
Email:

December 17, 2021 (Toronto, Ontario) – On December 17, 2021, a Hearing Panel of the Investment Industry Regulatory Organization of Canada (IIROC) accepted a Settlement Agreement, with sanctions, between IIROC staff and Scotia Capital Inc.

Scotia Capital Inc. admitted to the following violation:

  1. Between 2010 and 2019, Scotia Capital Inc. failed to establish and maintain a system of controls and supervision to ensure client fee agreements were accurately recorded in its fee management systems and clients were charged appropriately, contrary to IIROC Dealer Member Rules 38.1 and 2500.

Pursuant to the Settlement Agreement, Scotia Capital Inc. agreed to the following penalty:

  1. a fine in the amount of $140,000.

Scotia Capital Inc. also agreed to pay costs in the amount of $5,000 and report on the execution of the Remediation Plan (as defined in the Settlement Agreement) to Staff by January 31, 2022 and as thereafter required by Staff to ensure the Remediation Plan is completed satisfactorily. Scotia Capital Inc. has voluntarily committed to remediating clients in the amount of $32,348,719.64.

This case was resolved by Early Resolution Offer.

Enforcement Staff agreed to a 30% reduction on the sanctions IIROC would otherwise seek based on Scotia Capital Inc.’s proactive and exceptional cooperation, remedial measures implemented,  compensation to clients, and willingness to resolve this matter in a timely manner.

Early Resolution Offers promote the efficient resolution of cases at an earlier point in the enforcement process, while also ensuring investor harm is addressed through voluntary acts of compensation and the implementation of remedial measures by firms.

The Settlement Agreement is available at:                                                                                                   

Scotia Capital Inc. – Settlement Agreement

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

IIROC formally initiated the investigation into Scotia Capital Inc.’s conduct in February 2020. 

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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 31,000 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: