A former adviser at RBC Dominion Securities Inc. and Scotia Capital Inc. is alleged to have “impersonated his clients” at a firm he soon started after settling disciplinary actions in connection with his work at the 2 major banks.
The Ontario Securities Commission says Mark Steven Rotstein and his new firm Equilibrium Partners Inc. (EQ) obtained personal and corporate information from clients, including their passwords, after which communicated with market participants in order to execute buy and sell orders for clients.
“During many of these communications, Rotstein impersonated his clients,” the OSC alleges in a statement of allegations made public Tuesday.
“In so doing, he repeatedly misled market participants and their employees, in order to conduct activity that he and EQ must have been, but weren’t, registered.”
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A hearing in to the matter is to take place March 24 in the OSC’s headquarters in Toronto. None of the allegations have been proven.
Canada’s biggest capital markets regulator says Rotstein and EQ breached securities rules by engaging “in the process of exchanging and advising according of securities without being registered.”
The regulator says the Toronto man and the firm carried out more than 500 transactions for and with clients, with a settlement value exceeding $14,450,000, between July 2, 2013, and Oct. 4, 2014.
Before starting EQ, Rotstein helped RBC Dominion Securities from 1997 until he was terminated for cause in April of 2011. At his peak, he had roughly 2,000 client accounts with assets valued at about $500 million, according to the OSC.
He joined Scotia Capital exactly the same month he was let go by RBC, and subsequently settled the allegation brought by an investment Industry Regulatory Organization of Canada regarding the his work on RBC. Within the settlement, Rotstein “admitted that he had involved in a practice, for over a decade, of signing client names and passing those signatures off as the clients’ on account and investment documents, in dozens and potentially hundreds of instances,” according to the OSC.
Among other activities, Rotstein, who had been necessary to work under close supervision at Scotia, agreed to pay an excellent of $250,000.
However, he was asked by Scotia to resign in July of 2012, and IIROC subsequently brought another proceeding against him regarding the his work there. In June of 2012, he settled the 2nd IIROC proceeding by having an admission that he had entered a trade for a client without the client’s knowledge or authorization, based on the OSC.
His departure from Scotia “resulted in the automatic suspension of his registration,” the OSC document says, and Rotstein was prohibited in the July 2014 settlement from registering with IIROC for a period of 18 months.
In the event that his registration was to be reactivated, he agreed he’d be subject to strict supervision and to conditions and terms regarding his record keeping. The earliest he was eligible for registration was Jan. 3, 2016.
However, the OSC says Rotstein had incorporated EQ when the second settlement with IIROC was accepted in July 2014, and alleges he and also the firm “have been engaging in unlawful trading and advising for a year.”
