TORONTO, Nov. 12, 2012 /CNW/ - Following a disciplinary hearing held from May 7 to June 1, 2012 and a penalty hearing held October 11 and 12, 2012, a Hearing Panel of the Investment Industry Regulatory Organization of Canada ("IIROC") has found that Northern Securities Inc. ("NSI"), Victor Alboini, Fred Vance and Douglas Chornoboy contravened several IIROC Dealer Member Rules, and has imposed the penalties set out below.
The Hearing Panel's decision dated November 10, 2012 is available at
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Specifically, the Hearing Panel found that the Respondents committed the following violations:
Count 1: Between August and November 2008, Mr. Alboini, as Ultimate Designated Person and a Registered Representative at NSI, engaged in a trading practice which improperly obtained access to credit for his client, Jaguar Financial Corporation, and in doing so risked the capital of both NSI and its carrying broker, thereby engaging in conduct unbecoming or detrimental to the public interest, contrary to IIROC Dealer Member Rule 29.1;
Count 2: Between August and November 2008, Mr. Vance, as Chief Compliance Officer, failed to adequately supervise Mr. Alboini's trading activity involving Jaguar Financial Corporation and other NSI clients, contrary to IIROC Dealer Member Rules 1300.1, 1300.2 and 2500;
Count 3: From 2006 to 2010, NSI, Mr. Alboini, as Ultimate Designated Person, and Mr. Vance, as Chief Compliance Officer, repeatedly failed to ensure that NSI corrected deficiencies found in three business conduct compliance reviews and one trading conduct review, thereby engaging in conduct unbecoming or detrimental to the public interest, contrary to IDA By law 29.1 and IIROC Dealer Member Rule 29.1; and,
Count 5 (a): NSI, Mr. Alboini, as Ultimate Designated Person, and Mr. Chornoboy, as Chief Financial Officer from February 2008 to February 2009, filed or permitted to be filed inaccurate monthly financial reports which failed to account for leasehold improvement costs, thereby misstating NSI's risk adjusted capital, contrary to IDA By law 17.2 and IIROC Dealer Member Rule 17.2.
The Hearing Panel imposed the following penalties on the Respondents:
(i) For Mr. Alboini:
- A 2 year suspension in all capacities;
- A permanent ban as UDP;
- Count 1: a fine of $500,000;
- Count 3: a fine of $100,000;
- Count 5a: a fine of $25,000; and,
- Disgorgement of commission regarding Count 1 trades.
(ii) For Mr. Vance:
- Two 3-month suspensions in any supervisory capacity, to run concurrently;
- Count 2: a fine of $25,000;
- Count 3: a fine of $25,000;
(iii) For Mr. Chornoboy:
- Count 5a: a fine of $25,000;
(iv) For NSI:
- Count 3: a fine of $250,000;
- Count 5a: a fine of $50,000;
The Panel ordered that the above suspensions shall commence 14 days from the date of the decision and that the above fines and disgorgement shall be paid within 30 days of the decision.
The Panel also ordered costs to be paid as follows, within 30 days of the decision:
(a) Mr. Alboini: $125,000;
(b) Mr. Vance: $50,000;
(c) Mr. Chornoboy: $15,000;
(d) NSI: $150,000.
IIROC formally initiated the investigation into the Respondents' conduct in April 2009. The violations occurred when all three of the individual Respondents were registered with NSI, an IIROC-regulated firm. Mr. Alboini and Mr. Vance continue to be IIROC registrants at NSI. Mr. Chornoboy is no longer a registrant with an IIROC-regulated firm.
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IIROC is the national self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada. Created in 2008 through the consolidation of the Investment Dealers Association of Canada and Market Regulation Services Inc., IIROC sets high quality regulatory and investment industry standards, protects investors and strengthens market integrity while maintaining efficient and competitive capital markets.
IIROC carries out its regulatory responsibilities through setting and enforcing rules regarding the proficiency, business and financial conduct of dealer firms and their registered employees and through setting and enforcing market integrity rules regarding trading activity on Canadian equity marketplaces.
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.
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.
SOURCE Investment Industry Regulatory Organization of Canada (IIROC) - General News