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by Mike Caswell

The Canadian Investment Regulatory Organization has fined Stifel Nicolaus Canada Inc. $475,000 for failing to properly supervise its employees and their use of confidential information. In particular, CIRO says that Stifel employees shared details of upcoming offerings with hedge fund managers. Those hedge fund managers traded on the information, entering short sales ahead of the offerings, CIRO claims.

The penalties for Stifel are contained in a settlement agreement that CIRO released on Aug. 23, 2024. In addition to the $475,000 fine, the firm has agreed to pay $25,000 in CIRO's costs. The penalties represent a negotiated settlement, in which Stifel has admitted to the violations, at least for the purpose of settling the matter.

The case goes back to March, 2020, when Stifel had placed all its employees on a remote working program in the early stages of the COVID-19 pandemic. As with many firms, Stifel remained regularly involved in offerings of shares in public companies, with employees discussing the sales of millions of shares and the associated details, such as the price.

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