A hearing panel of the Investment Industry Regulatory Organization of Canada (IIROC) has imposed penalties against Georges Benarroch, Linda Kent, Marjorie Ann Glover and Credifinance Securities Limited, as follows:

  • Georges Benarroch – $250,000 fine and a 15-year suspension from any IIROC registration;
  • Linda Kent – $50,000 fine, $170,000 disgorgement, and a two-year suspension from any IIROC registration;
  • Marjorie Ann Glover – $50,000 fine, a one-year suspension from any IIROC registration, and a five-year suspension from any IIROC registration that permits a supervisory role; and
  • Credifinance Securities Limited – $50,000 fine and permanent expulsion from IIROC registration.

    • The panel also required the individuals to pay costs in the amounts of $50,000 by Mr. Benarroch, $25,000 by Ms. Kent and $25,000 by Ms. Glover.

    The penalty decision is based on an Agreed Statement of Facts and Violations in which Mr. Benarroch and Ms. Kent admit that they failed to fulfill their gatekeeper responsibilities, and Ms. Glover and Credifinance Securities Limited admit that they failed to properly supervise the conduct of their staff.

    In its decision, the panel stated, “There is ample evidence in the Statement that the actions of the Respondents … [were]-planned, organized, systematic, involved multiple incidents over a number of years, and in the case of Benarroch and Kent intended to benefit them directly or indirectly.”

    This decision replaces an earlier IIROC Hearing Panel penalty decision which was set aside by the Ontario Securities Commission (OSC) after finding that the panel offered inadequate reasons for its decision. The OSC ordered that the matter be remitted to a newly constituted IIROC Hearing Panel for a penalty hearing.

    Specifically, the respondents admitted that from about January 2003 to about March 2006, they engaged in conduct unbecoming and detrimental to the public interest, contrary to IIROC Rule 29.1 in the following counts:

    • Mr. Benarroch and Ms. Kent failed to perform their gatekeeper responsibilities regarding trading in client accounts in the shares of two companies, Magnum D’Or Resources Inc. and Osprey Gold Corp., and they also engaged in financial and business transactions with Credifinance clients in relation to the distribution and sale of shares in these companies.
    • Ms. Glover, while a Registered Representative and Chief Compliance Officer with Credifinance, failed to exercise due diligence and adequately supervise the conduct of Mr. Benarroch and Ms. Kent in their dealings with clients, particularly with regard to trading in Magnum and Osprey shares.
    • Credifinance failed in its gatekeeper role by failing to supervise the conduct of Mr. Benarroch and Ms. Kent and failing to supervise the transactions of their clients’ accounts.

    IIROC formally began its investigation into the conduct of Mr. Benarroch, Ms. Kent, Ms. Glover and Credifinance Securities in January 2004. The violations occurred when Mr. Benarroch, Ms. Kent and Ms. Glover were Registered Representatives with the Toronto branch of Credifinance Securities Ltd., an IIROC-regulated firm.

    Georges Benarroch and Linda Kent are no longer registered with an IIROC-regulated firm. Pursuant to the penalty decision dated February 16, 2011, Marjorie Ann Glover’s IIROC registration is currently suspended. Credifinance Securities Limited has been expelled from membership in IIROC.