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

In the agreement, Mr. Roy admits that he failed in his know-your-client obligations and that he inappropriately followed trading instructions from an unauthorized third party.

Mr. Roy has agreed to a $20,000 fine, to pay $2,500 in costs and to a suspension from approval in any capacity for five years. If he is re-registered with an IIROC-regulated firm after the suspension, he has agreed to a permanent prohibition from acting in a management or supervisory capacity and to work under close supervision for six months.

Specifically, Mr. Roy admits that he:

  • Failed to use due diligence to ensure he learned all the essential facts relative to his clients, contrary to IIROC Rule 1300.1 (a) and 1300.1 (b); and
  • Accepted and followed instructions from an unauthorized third party, contrary to IIROC Rule 200.1(i)(3). This rule requires, in part, that before trading instructions on an account are accepted from someone other than the customer, a written trading authorization is required.

The violations occurred from January 2005 to June 2007 while Mr. Roy was a registered representative at the Montréal branch of Industrial Alliance Securities Inc., an IIROC-regulated firm. IIROC began the formal investigation into Mr. Roy’s conduct on September 26, 2007. Mr. Roy is no longer a registrant with an IIROC-regulated firm.