CIRO Sanctions Fortrade Canada Limited

TORONTO, March 11, 2024 /CNW/ - On February 20, 2023, a hearing panel of the Canadian Investment Regulatory Organization (CIRO) held a hearing under the Investment Dealer and Partially Consolidated Rules and accepted a settlement agreement, with sanctions, between CIRO Enforcement Staff and Fortrade Canada Limited (Fortrade).

Fortrade is a CIRO-regulated order execution only (OEO) firm. CIRO rules prohibit firms from providing recommendations to clients holding OEO accounts. In the settlement agreement, Fortrade admitted to making recommendations to clients, failing to establish and maintain a supervisory system that was reasonably designed to achieve compliance with CIRO requirements and failing to retain adequate records to demonstrate compliance with CIRO requirements.

Pursuant to the settlement agreement, Fortrade agreed to the following sanctions:

1. 1. 1. a fine of $2,000,000,
      2. a payment of US$703,478.91 to clients with unresolved recommendation-related complaints received as of July 7, 2023, and representing net losses incurred by the clients up to the date of the Temporary Order,
      3. creation of a fund of US$6,000,000 (Fund) to be used to make payments to eligible clients who make a claim to the Fund,
      4. retention, in a location in Ontario, Canada, of telephone call recordings of calls with Fortrade clients for seven years from the date of each call, and
      5. the Temporary Order will remain in effect until Fortrade has satisfied the terms and notice has been provided to eligible clients in respect of their ability to make a claim to the Fund.

Fortrade also agreed to pay costs in the amount of $100,000.

Further details are available in the Settlement Agreement at:

Fortrade Canada Limited – Settlement Agreement 

The hearing panel's decision will be made available at www.ciro.ca.

All information about disciplinary proceedings relating to current and former member firms and individual registrants under the Investment Dealer and Partially Consolidated Rules (for investment dealers), the Mutual Fund Dealer Rules (for mutual fund dealers) and the Universal Market Integrity Rules (UMIR) is available on CIRO's website. 

Background information regarding the qualifications and disciplinary history, if any, of advisors currently employed by CIRO-regulated investment firms is available free of charge through the AdvisorReport service. Information on how to make dealer, advisor or marketplace-related complaints is available by calling 1-877-442-4322.

CIRO investigates possible misconduct by its member firms and individual registrants. It can bring disciplinary proceedings which may result in sanctions including fines, suspensions, permanent bars, expulsion from membership, or termination of rights and privileges for individuals and firms.

The Canadian Investment Regulatory Organization (CIRO) is the national self-regulatory organization that oversees all investment dealers, mutual fund dealers and trading activity on Canada's debt and equity marketplaces. CIRO is committed to the protection of investors, providing efficient and consistent regulation, and building Canadians' trust in financial regulation and the people managing their investments. For more information, visit www.ciro.ca.

SOURCE Canadian Investment Regulatory Organization (CIRO)