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Globe says OSC fines Caldwell Investment $2.05-million

2019-07-22 07:52 ET - In the News

The Globe and Mail reports in its Saturday edition that the Ontario Securities Commission has ordered Caldwell Investment Management Ltd. to pay $1.8-million for breaking its obligation to clients over a four-year period, in the regulator's first decision on a concept known as best execution. The Globe's Megan Devlin writes that Caldwell overcharged mutual fund clients by directing trades to its wholly owned dealer, Caldwell Securities Ltd., instead of rival firms offering better prices on commissions, the OSC said. "Over an almost four-year period, [Caldwell Investment] failed in its obligation to provide best execution of equity and bond trades for its clients which resulted in overpayments by its clients," the OSC's decision read. Funnelling trades through its own dealer at a greater expense to clients represented "a clear conflict of interest," it added. The mutual fund company will also pay $250,000 to cover investigation costs, but will not face a suspension of its registration, the OSC said in approving a settlement with Caldwell Investment on Friday. The Globe notes that the concept of best execution requires investment dealers to find the best trade option reasonably available on behalf of clients.

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