The Ontario Securities Commission (OSC) has approved a no-contest settlement agreement with Scotia Capital Inc., Scotia Securities Inc. and HollisWealth Advisory Services Inc. (the Scotia Dealers) in relation to a matter that the Scotia Dealers discovered and self-reported to the OSC and that resulted in certain clients paying excess fees.
This settlement follows allegations by OSC Staff that there were inadequacies in the Scotia Dealers’ systems of controls and supervision, which resulted in certain clients paying excess fees that were not detected or corrected in a timely manner. OSC Staff do not allege, and have found no evidence of dishonest conduct by the Scotia Dealers.
While having neither admitted nor denied the accuracy of the facts and conclusions of OSC Staff, the Scotia Dealers have agreed to the settlement, and intend to compensate clients a total of $19,997,821, including opportunity costs on fees.
In addition, the Scotia Dealers have made a payment of $800,000 to advance the OSC’s mandate of protecting investors, plus a further payment of $50,000 to be allocated toward the costs of the investigation.
After reporting this matter, the Scotia Dealers provided prompt, detailed and candid co-operation to OSC Staff. The Scotia Dealers have also implemented additional controls and supervision to prevent a recurrence of this matter.
To date, the OSC has approved five no-contest settlements, resulting in approximately $200 million in compensation to investors.