The Globe and Mail reports in its Tuesday, Feb. 13, edition that the Investment Industry Regulatory Organization of Canada has fined National Bank Financial managing director Sean St. John $90,000 after he struck a pact with a client to gain unfair access to a company's newly issued bonds.
The Globe's James Bradshaw writes that on Feb. 1, IIROC approved a settlement with Mr. St. John, claiming he "failed to respect the fair allocation process" required by trading regulations and the bank's own policies. The infractions date back to September, 2012, when National Bank was co-lead on a deal helping a company issue new bonds. In the days leading up to the issuance, Mr. St. John came to an understanding with an unnamed institutional client, which bought $30-million of the paper. Under the informal agreement, the client then sold $10-million from its allotment back to National Bank.
The bank's unnamed institutional client initially expressed reservations, but agreed to sell debentures back to the bank. IIROC does not name the company issuing new debt, but on that date, Sherritt International offered $400-million in senior unsecured debentures through a syndicate led by National Bank and Bank of Nova Scotia.
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