A hearing panel of the Investment Industry Regulatory Organization of Canada (IIROC) has accepted a settlement agreement, with sanctions, between IIROC staff and Konstantinos Georgeos Arapis.

With this agreement, Arapis admits that he had clients participate in an off-book transaction and that he failed to ensure that certain trades were within the bounds of good business practice.

Arapis’ penalty includes a $45,000 fine and $5,000 in costs. It also requires Arapis to re-write the Options Supervisors Course, followed by a 12-month period of close supervision for all options trading, with monthly reports to be filed with IIROC. During this period, he is prohibited from trading or advising in Level 4 Option accounts, which are accounts that have been approved for certain trading activities, including the right to buy and sell uncovered options. He was also given a six-month suspension from acting as a Supervisor.

Specifically, Arapis admits to:

  • Soliciting clients for a private placement of shares in a company in which he had an interest, contrary to IIROC Rule 29.1;
  • Effecting this transaction off-book and without his firm’s knowledge, and receiving remuneration directly from the company, contrary to IIROC Rule 18.15; and
  • Effecting 111 option transactions in 23 client accounts which were outside the accounts’ approved option level, contrary to IIROC Rule 1300.1(o).

The solicitation for the private placement occurred between June 2005 and November 2005. The option transactions in the client accounts occurred between May 14, 2008 and October 31, 2008.

IIROC began its investigation into Arapis’ conduct in March 2009. The violations occurred when he was a Registered Representative with Saskatoon branches of Assante Capital Management Inc. and Raymond James Ltd., both IIROC-regulated firms. Arapis is currently registered with a Saskatoon branch of Canaccord Genuity Corp., an IIROC-regulated firm.