CIRO sanctions another ex-trader in disclosure case

Another former trader at Stifel Nicolaus Canada Inc. is being sanctioned for disclosing potentially confidential information to hedge funds that then traded on that information.

On Nov. 25, a hearing panel of the Canadian Investment Regulatory Organization (CIRO) approved a settlement agreement with Jason Adam Beales, a former rep and managing director with Stifel Nicolaus in Toronto. In the settlement agreement, Beales admitted to revealing potentially confidential information about a proposed block trade to multiple hedge fund clients — one of the hedge funds then traded on that information, without his knowledge.

CIRO also settled with the firm’s former head of sales and trading for similar conduct — alerting hedge fund clients about pending block trades, information that a hedge fund then traded against.

And, in August, CIRO settled with the firm itself, which admitted to failing to properly supervise these kinds of disclosures.

Stifel Nicolaus was fined $475,000 for its failings and agreed to pay $25,000 in costs. The former head of sales and trading agreed to a $75,000 fine, a six-month suspension, to pay $5,000 in costs and to complete the Canadian Securities Institute’s Conduct and Practices Handbook (CPH) course (or equivalent) before re-entering the industry.

Under the latest settlement, Beales agreed to a $60,000 fine, a six-month suspension, to complete the CPH course and to pay $5,000 in costs to resolve the allegations.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.