Disciplinary Proceedings: Rule 6.2(1)(b)(viii) and (x) was considered In the Matter of Salman Partners Inc. (“Salman”), Sameh Magid (“Magid”), William Burk (“Burk”) and Ian Todd (“Todd”) (February 18, 2005) SA 2005-001. See Disciplinary Proceedings under Rule 3.1.
Disciplinary Proceedings: In the Matter of Union Securities Ltd. (“Union”) (April 18, 2006) DN 2006-004
Facts – Between 15 October 2002 and 31 July 2005, Union failed to implement adequate trade supervision and compliance systems and appoint a Head of Trading with the effective responsibility for supervising trading. In failing to do so, Union’s supervisory system could not adequately mitigate certain risks to the marketplace which were identified by RS in the course of its trade desk reviews. In particular, Union failed to update its written policies and procedures in a timely fashion to ensure that orders entered on a marketplace contained acceptable order designations, failed conduct accurate internal auditing and maintain an appropriate audit trail in its paper ticket practices.
Disposition – A Participant is required to implement an updated trade supervision and compliance system which is appropriate for its business and which allows the Participant and its directors, officers, partners and employees to detect, prevent and address violations or a possible violations of UMIR. Union failed to adopt, implement and update its trading supervision and compliance policies and procedures such that they met the minimum requirements under UMIR.
Requirements Considered – Rules 6.2, 10.11, 7.1 and Policy 7.1
Sanction – $150,000 fine; certification to RS by Union’s President and a director of Union (on behalf of the Board of Directors) that:
- on or before 30 May 2006 Union will implement all of the recommendations made in the Consultant Report,
- on or before 30 July 2006 Union has implemented all of the recommendations made in the Consultancy Report, including developing implementing, and filing with RS, enhanced supervision and compliance procedures to reduce incidence of audit trail deficiencies, and
- on or before 30 September 2006, that they expect the procedures Union has implemented will reduce audit trail deficiency rates to less than 10%.
Also, Union will consent to and cooperate with any and all reasonable trade desk review and information requests from RS to monitor progress on achieving targets.
Disciplinary Proceedings: Rule 6.2(1)(b) was considered In the Matter of Raymond James Ltd. (“Raymond James”) and Marc Deslongchamps (“Deslongchamps”) (June 30, 2006) DN 2006-006. See Disciplinary Proceedings under Rule 5.3
Disciplinary Proceedings: In the Matter of Golden Capital Securities Ltd. (“Golden”), Jack Finkelstein (“Finkelstein”) and Jeff Rutledge (“Rutledge”) (November 23, 2007) DN 2007-004
Facts – Between April 1, 2002 and July 31, 2005, Golden was deficient in a number of its order designation and audit trail requirements. Golden also failed to appoint a Head of Trading and trading supervisor and failed to ensure its employees with trade supervision functions were properly trained.
Between June 2004 and March 2005, Finkelstein participated in several trades that involved matching buy and sell orders to “cross” securities that were either missing or contained inaccurate order information related to the size, price, time of receipt and/or variations to an order. In one case Finkelstein failed to correctly designate the inventory side of a client/principal cross involving 50 standard trading units or less which resulted in the cross being executed without the required price improvement to the client.
Between June 2004 and March 2005, Rutledge participated in several trades involving matching buy and sell orders to “cross” securities that were either missing or contained inaccurate order information related to the size, price, time of receipt and/or variations to an order. In one case Rutledge failed to correctly designate the inventory side of a client/principal cross involving 50 standard trading units or less which resulted in the cross being executed without the required price improvement to the client.
Disposition – By failing to ensure that each order entered on a marketplace contained the proper order designations and failing to implement adequate policies and procedures to ensure compliance with UMIR, Golden contravened Rule 6.2(1)(b), Rule 7.1, Rule 7.1(3) and Policy 7.1 of UMIR. Finkelstein and Rutledge, by failing to record all order designations and information required with respect to the entry of an order on a marketplace and failing to ensure that a client order executed against a principal order or non-client order receive the required price improvement breached Rules 6.2, 6.2(1)(b) and 8.1 of UMIR.
Requirements Considered – Rules 6.2, 7.1, 8.1, 10.11 and Policy 7.1
Sanction – Golden - $180,000 fine and costs of $20,000;
Finkelstein - $25,000 fine; and
Rutledge - $35,000 fine and costs of $5,000.
Disciplinary Proceedings: In the Matter of Vinh-Phat Nguyen-Qui (“Nguyen-Qui”) (October 11, 2012) DN 12-0298
Facts – Between October and December 2009 (the “Relevant Period”), Nguyen-Qui, a Registered Representative employed by W.D. Latimer Co. Limited, entered buy and sell orders on the TSX in the pre-opening market and cancelled them prior to market opening for the sole objective of acquiring a better chronological position once the market opened. Nguyen-Qui also entered short sale orders in the pre-opening market without designating them as short sales and/or at a price below the last sale price as indicated in the consolidated market display.
Disposition – In the Relevant Period, Nguyen-Qui entered orders he knew or ought to reasonably have known would create or could reasonably be expected to create, a false or misleading appearance of trading activity or interest in the purchase or sale of the security, contrary to UMIR 2.2(2)(a); entered short sale orders in the pre-opening market without proper designation contrary to UMIR 6.2(1)(b)(viii); and entered short sale orders in the pre-opening market below the last sale price, contrary to UMIR 3.1(1).
Requirements Considered – Rule 2.2(2)(a), 3.1(1) and 6.2(1)(b)(viii).
Sanction – The Hearing Panel imposed a prohibition on Nguyen-Qui from accessing the market as a Registered Representative for a period of two months and a fine of $10,000 for the first violation plus fines of $5,000 for each of the two additional violations; Nguyen-Qui was also required to take the Trader Training Course again and pay costs in the amount of $10,00