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by Mike Caswell

The Canadian Investment Regulatory Organization has filed a case against Toronto's Hampton Securities Ltd. and its chairman, Peter Deeb, claiming that Mr. Deeb improperly obtained access to credit and entered high-risk trades using his firm's inventory account. He also entered short sales to obtain money to participate in new issues, with the resulting activity generating commissions for Hampton, CIRO says. Mr. Deeb's actions caused Hampton's carrying broker to bear unnecessary and significant risk, according to CIRO.

The allegations are contained in a notice of hearing that CIRO released on Friday, Nov. 10. The case mostly targets Mr. Deeb, who is the chairman, chief executive officer and ultimate designated person at Hampton Securities. CIRO has also named the firm itself as a respondent, with the possible penalties including suspension of its membership.

The case centres in part around Mr. Deeb's misuse of Hampton's average price inventory account. These accounts ordinarily allow firms to place multiple small orders at once without the inconvenience and paperwork associated with placing the orders individually. The accounts can also be used when an institutional order is to be prorated amongst internal accounts.

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