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Screenshot of a breaking news alert e-mail from Q2 2017
The Ontario Securities Commission (OSC) has approved a no-contest settlement agreement with CIBC World Markets Inc., CIBC Investor Services Inc. and CIBC Securities Inc. (the CIBC Dealers) in relation to a matter that the CIBC 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 CIBC 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 CIBC Dealers.
While having neither admitted nor denied the accuracy of the facts and conclusions of OSC Staff, the CIBC Dealers have agreed to the settlement, and intend to compensate clients a total of $73,260,104, including opportunity costs.
In addition, the CIBC Dealers have made a payment of $3,000,000 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 CIBC Dealers provided prompt, detailed and candid co-operation to OSC Staff. The CIBC Dealers have also implemented additional controls and supervision to prevent a recurrence of this matter.
Strong compliance systems are critical to investor protection and market confidence,” said Jeff Kehoe, Director of Enforcement at the OSC. “We expect registrants to have effective controls in place to deal fairly with clients with regard to fees, and to correct non-compliant conduct in a timely manner.
To date, the OSC has approved six no-contest settlements, resulting in approximately $270 million in compensation to investors.