It doesn’t happen very often but the SRO has given a big dealer more than a slap on the wrist for branch transgressions.
An IIROC hearing panel announced Tuesday that it had accepted the settlement agreement between its staff and Assante Capital Management reached earlier in October sending a message that the SRO won’t turn a blind eye to management inaction.
Assante admitted that it failed to adequately fulfill its obligations to conduct Tier 2 supervision of its branch located in Red Deer, Alberta; and to supervise the branch to mitigate for potential conflicts of interest on the part of the Branch Manager.
Specifically, Assante admitted to the following violation:
Between January 2007 and May 2012, Assante failed to adequately fulfill its obligations to conduct Tier 2 supervision of a sub-branch, contrary to IIROC Dealer Member Rule 2500.
Pursuant to the Settlement Agreement, Assante agreed to a fine of $400,000 as well as $30,000 in IIROC costs.
Christine Malley and Brian Malley were the advisors behind the case that led to IIROC’s today’s announcement. The transgressions occurred between 2005 and 2012. They were the subject of an IIROC discipline proceeding resulting in a decision dated June 25, 2014.
In that decision the IIROC hearing panel found that Brian Malley failed to ensure that his recommendations were suitable for ten clients when he recommended that they hold highly concentrated positions in speculative securities such as junior issuers and commodity based leveraged exchange traded funds.
In addition, the panel found that he had engaged in discretionary trading in the accounts of seven of the ten clients. The panel also concluded that most of the clients suffered substantial losses in their accounts with decreases in value ranging from approximately 23%-54%. Brian Malley was permanently banned and given a fine of $300,000.
Christine Malley, his wife and supervisor, failed to properly supervise her husband’s client accounts failing to take the necessary actions to prevent him from engaging in highly aggressive trading strategies; and failed to undertake any meaningful supervision with respect to the activities in his clients’ accounts. The panel imposed a permanent registration ban upon Christine Malley together with a fine of $250,000.
Assante admitted that it failed to adequately fulfill its obligations to conduct Tier 2 supervision of its branch located in Red Deer, Alberta; and to supervise the branch to mitigate for potential conflicts of interest on the part of the Branch Manager.
Specifically, Assante admitted to the following violation:
Between January 2007 and May 2012, Assante failed to adequately fulfill its obligations to conduct Tier 2 supervision of a sub-branch, contrary to IIROC Dealer Member Rule 2500.
Pursuant to the Settlement Agreement, Assante agreed to a fine of $400,000 as well as $30,000 in IIROC costs.
Christine Malley and Brian Malley were the advisors behind the case that led to IIROC’s today’s announcement. The transgressions occurred between 2005 and 2012. They were the subject of an IIROC discipline proceeding resulting in a decision dated June 25, 2014.
In that decision the IIROC hearing panel found that Brian Malley failed to ensure that his recommendations were suitable for ten clients when he recommended that they hold highly concentrated positions in speculative securities such as junior issuers and commodity based leveraged exchange traded funds.
In addition, the panel found that he had engaged in discretionary trading in the accounts of seven of the ten clients. The panel also concluded that most of the clients suffered substantial losses in their accounts with decreases in value ranging from approximately 23%-54%. Brian Malley was permanently banned and given a fine of $300,000.
Christine Malley, his wife and supervisor, failed to properly supervise her husband’s client accounts failing to take the necessary actions to prevent him from engaging in highly aggressive trading strategies; and failed to undertake any meaningful supervision with respect to the activities in his clients’ accounts. The panel imposed a permanent registration ban upon Christine Malley together with a fine of $250,000.
