Friday, 25 July 2014
Last updated 1 hour ago
Aug 1 2008 | 10:30am ET
TD Waterhouse Canada has settled a regulatory action stemming from its sale of hedge funds managed by Norshield Financial Group, which collapsed amid a scandal in 2005.
The discount brokerage admitted that it allowed non-accredited investors to invest in Norshield’s Olympus hedge funds and that it lacked the proper oversight over the hedge fund sales, the Investment Industry Regulatory of Canada said yesterday. TD Waterhouse agreed to pay C$1,970,441 (US$1.9 million) to make those non-accredited investors whole, as well as C$50,000 in costs.
A “small number of Waterhouse investment advisers had made honest errors in allowing the non-accredited investors to purchase the funds” and the firm “ensured that the non-accredited investors received restitution,” TD Waterhouse spokeswoman Susan Webb told the Globe and Mail.
“We’re confident that for some years we’ve had all of the right procedures and systems in place to make sure things like this wouldn’t happen.”
TD admitted that, from 2001 until early 2005, it facilitated the purchase of Olympus funds without ensuring that the buyers were accredited. It also acknowledged that it did not maintain a review or approval process for such sales, and that it failed to properly train and give guidance to its investment advisers about hedge fund sales.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…