BMO Nesbitt Burns has agreed to pay a fine of $125,000 for failing to prevent “churning” by a registered advisor in relation to two client accounts.
The firm has reached a settlement agreement with self-regulatory organization IIROC, admitting that it failed to adequately supervise the activities of Paul Brum regarding the accounts, which involved high new issue commissions and high turnover ratios. This should have raised suitability and conflict of interest concerns.
The IIROC settlement agreement stated how the rep in question executed frequent trades in new issues that were not suitable for the clients involved. It added that BMO Nesbit Burns “failed to query or prevent Brum’s trading in these client accounts in a timely manner and accordingly did not adequately supervise Brum”.
