On February 14, 2017, an IIROC hearing panel accepted a settlement agreement, with sanctions, between IIROC staff and Scotia Capital Inc.

IIROC says Scotia Capital admitted that it failed to properly supervise the conduct of Krishna Sammy, a portfolio manager at DWM Securities, to ensure compliance with the dealer member rules.

Pursuant to the settlement agreement, Scotia Capital agreed to a fine of $175,000 and costs of $10,000. Read the settlement agreement.

This settlement follows a related settlement between IIROC and Louis Constantine Cavalaris, who was fined $60,000 in December 2016 for failing to supervise Sammy.

In May 2016, an IIROC hearing panel imposed the following penalties on Sammy: a $250,000 fine, a five-year ban from approval with IIROC and costs of $75,000. Earlier, in a January 2016 document, IIROC said the rep had placed himself in a conflict of interest with clients and that he had “recommended the purchase of securities to several clients without using due diligence” between January 2009 and December 2011.

IIROC started the investigation into Scotia Capital’s conduct in June 2013. IIROC says Sammy’s misconduct happened at DWM prior to its acquisition by Scotia in February 2011.

Scotia has paid more than $3.5 million to 47 clients to compensate those clients for Sammy’s conduct. It has also enhanced its compliance procedures.