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by Mike Caswell

The Canadian Investment Regulatory Organization has fined Toronto's Clarus Securities Inc. $425,000 for failing to investigate suspicious trading in Canadian Securities Exchange cannabis listing Liberty Health Sciences Inc. in 2017 and 2018. CIRO says that Clarus allowed a client to execute a series of prearranged trades without questioning if the activity was manipulative. The trading, which often occurred on back-to-back days, had Clarus as the largest buyer and seller of Liberty Health shares.

The penalties for Clarus are contained in a settlement agreement that CIRO released on Thursday, Oct. 10. In addition to the $425,000 fine, the firm has agreed to pay $25,000 in CIRO's costs. In settling the case, Clarus has agreed that it committed the violations, at least for the purposes of entering the settlement.

The case stems from trades in Liberty Health that a Clarus client (only identified as "AD") entered from July 26, 2017, to April 30, 2018. According to CIRO, the orders were such that Clarus should have paid close attention to them. In particular, the firm should have made sure that they were not part of a "potential manipulative or deceptive method, act or practice, nor an attempt to create a false or misleading appearance of trading activity" in Liberty Health.

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