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by Mike Caswell
The U.S. Securities and Exchange Commission has fined Canaccord Genuity LLC $250,000 for failures related to its work in over-the-counter stocks. (All figures are in U.S. dollars.) The SEC says that the firm was a market-maker for dozens of thinly traded OTC securities, but did not ensure that the disclosure of the issuers was accurate. Among other things, Canaccord was supposed to review the prospectuses and financial statements of the companies.
The penalty for Canaccord is contained in an order instituting proceedings that the SEC released on Wednesday, Aug. 14. In addition to the $250,000 fine, the SEC has imposed an order barring any future violations by Canaccord. The sanctions represent a negotiated settlement, in which Canaccord did not admit any wrongdoing.
The SEC's case centres around the reporting for OTC and non-listed securities for which Canaccord was making a market. In the U.S., brokerages are required to maintain information about such issuers, including financial statements. Brokerages must review the material and have a reasonable basis to believe that the information is accurate. A designated person must sign a document, known as Form 211, validating that the material is accurate and that it came from a reliable source.
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