A hearing has been scheduled for October 29 by the Investment Industry Regulatory Organization of Canada
(IIROC) to consider a settlement agreement proposed by Industrial Alliance
Securities (IAS) over alleged client transactions executed outside the bounds of “good business practice.”
The proposed agreement concerns allegations that IAS failed to take reasonable measures to ensure that two of its representatives, and certain supervisors, understood the features and risks inherent in leveraged ETFs, and failed to intervene in respect of one of its representatives to ensure that trades executed in the accounts of two clients were within the bounds of good business practice.
It's not been a great week for IAS and IIROC. On Thursday a disciplinary hearing was held for IIROC for one of Industrial’s former investment professionals, accused of appropriating $15,972.88 from a deceased client by means of a blank cheque in 2014. At the time she was working for IAS Montreal.
It should be noted that the advisor is no longer a registrant with IAS or an IIROC-regulated firm and the two cases are not related.
IAS did have some good news earlier this month however, when it closed its acquisition of FIN-XO Securities, a Montreal-based full-service broker with 30 advisors across Canada and $700m under administration.
The move appears to be a win/win for both organizations. IAS gets increased distribution while FIN-XO gets the resources of a much larger financial services organization.