SEC fines Canaccord $250,000 for trading securities without required review

Regulator says New York B-D's compliance associate had no training to perform duties

Aug 14, 2019 @ 4:19 pm

By InvestmentNews

The Securities and Exchange Commission has charged Canaccord Genuity, a New York-based broker-dealer, with enabling trading in dozens of thinly-traded securities without conducting the review required by the federal securities laws.

(More: SEC fines and censures Talimco for manipulating real estate auction)

Without admitting or denying the SEC's findings, Canaccord consented to the SEC's order, which required it to cease and desist from causing any future violation of trading rules. It also consented to a censure and the imposition of a $250,000 penalty.

According to the SEC's order, Canaccord published quotes and made markets in dozens of over-the-counter securities without performing the required review to determine that the broker-dealer had a reasonable basis for believing the accuracy of the prospectus and other information made available by the issuer.

(More: SEC fines Wedbush $8.1 million over improper handling of ADRs)

The order said that the firm delegated those review responsibilities to a compliance associate who had no trading experience and no formal training in conducting such a review, such as training related to the analysis of financial statements and other information.

(More:SEC shutdown opens the door for fraud)

"As a result of the deficient review performed by the compliance associate, Canaccord allowed dozens of OTC securities to be traded in U.S. markets without conducting the review required to protect investors," the SEC said in a release.

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