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by Mike Caswell

The Canadian Investment Regulatory Organization has imposed $2.8-million in sanctions on Canaccord Genuity Corp. for facilitating as much as $779-million (U.S.) in questionable trading. CIRO claims that the firm allowed thousands of sell orders despite red flags connected to the trading. Those selling the stock included individuals facing civil cases in the United States as well as one with a criminal conviction, according to CIRO.

The penalties for Canaccord are contained in a settlement agreement that CIRO released on Wednesday, May 28. The $2.8-million that Canaccord must pay includes disgorgement of $2.2-million, plus a $600,000 fine. On top of that, the firm must pay $50,000 in CIRO's costs. In agreeing to the penalties, Canaccord has admitted to the violations, at least for the purpose of settling the matter.

The case arises from accounts that Canaccord opened in May, 2021, for a U.K. entity named Crito Capital LLP. The accounts mostly sold over-the-counter securities in the U.S. on behalf of others, according to CIRO. Crito told Canaccord that it operated as a broker and clearing agent for a trust that in turn had various underlying clients.

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