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IIROC cites Rowlatt over suspicious insider trades

2020-09-21 20:25 ET - Street Wire

See Street Wire (C-*IIROC) Investment Industry Regulatory Organization o

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by Mike Caswell

The Investment Industry Regulatory Organization of Canada has imposed $57,500 in sanctions on Aaron Rowlatt, an employee of Industrial Alliance Securities Inc. who facilitated suspicious trades in a pair of TSX Venture Exchange listings. IIROC said that Mr. Rowlatt failed in his "gatekeeper responsibilities," allowing insiders to makes trades that boosted the stock and made no economic sense. Trades entered by those insiders made up half of his commissions, according to IIROC.

The penalties are contained in a settlement agreement that IIROC released on Monday, Sept. 21. Mr. Rowlatt has agreed to pay $50,000 plus $7,500 in IIROC's costs. While not strictly part of his penalty, IIROC notes that he has been working under "enhanced supervision" since July, 2019. Mr. Rowlatt accepted the penalties without a hearing, admitting to the misconduct for the purposes of the settlement.

The trades at issue occurred in 2017, and were in two TSX-V listings, Canadian Oil Recovery & Remediation Enterprises Ltd. and Spot Coffee (Canada) Ltd. (IIROC only identifies the companies as "Company X" and "Company Y," but trading records provided in the settlement make it clear that the regulator is referring to those two listings.) According to IIROC, Mr. Rowlatt's clients were insiders of those companies, controlling shares through holding companies, family trusts or accounts in the names of family members.

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