The wealth firm will also repay more than $1.4 million to those overcharged
Canaccord Genuity did not have the necessary checks in place to ensure that clients with certain fee-based accounts would not be overcharged.
That’s according to a settlement made between the wealth firm and the Investment Industry Regulatory Organization of Canada (IIROC), with the regulator fining the firm $157,500 plus costs of $50,000.
In a statement issued Wednesday, IIROC said:
Canaccord admitted that between January 2010 and May 2019 the Respondent failed to establish and maintain a system of internal controls and supervision reasonably designed to achieve compliance with IIROC requirements, including to deal fairly with clients with regard to fees, contrary to Dealer Member Rules 38.1 and 2500.
The matter dates back to September 2018 when IIROC staff requested information from Canaccord as part of its Business Conduct Examination. Information supplied detailed certain circumstances where Canaccord permitted trailer or embedded fees to be charged for certain fee-based accounts.
In further investigations, IIROC found issues with the embedded fees dating back to 2010. Canaccord had previously believed that its own policies and procedures were adequate to avoid the issues detected around fees charged on securities that should not have been part of fee calculations.
Canaccord agreed voluntarily to repay more than $1.4 million to around 6,000 affected clients and former clients. More than $1.3 million has already been repaid.
