• Follow us


OSC approves $24.5M in settlements with TD, RBC over FX traders sharing info | The Star

TORONTO - Canada’s two biggest lenders have agreed to pay nearly $24.5 million in fines to the Ontario Securities Commission to settle allegations that currency traders inappropriately shared confidential information in chatrooms to gain a potentially unfair advantage, and that neither TD Bank nor Royal Bank had adequate controls to keep them in check.

TD and RBC have agreed to voluntary payments of $9,300,900 and $13,552,000, respectively, as part of settlement agreements approved by an OSC panel Friday.

The lenders also agreed to an additional payment of $800,000 each to cover the costs of the OSC’s investigation. As well, internal audit groups at both banks will conduct audits of their compliance with the FX Global Code, a set of principles for the foreign exchange market.

“These are serious failings by two of the biggest, most sophisticated and well-resourced financial institutions in Canada,” said the OSC’s director of enforcement Jeff Kehoe in a statement Friday.

“RBC and TD had the ability and means to properly monitor use of technology with known compliance risks in their FX trading, yet for more than three years, they failed to adequately do so. As a result, traders were free to engage in self-serving behaviour that put the banks’ economic interests ahead of their customers, other market participants and the integrity of the capital markets.”

The multi-million dollar settlements with Canada’s biggest securities regulator come days after both lenders reported their latest quarterly results. Last week, RBC reported that it earned third-quarter profits of $3.26 billion. On Thursday, TD reported that it earned $3.26 billion in net income during the quarter ended July 31.

In calculating the settlement amounts, OSC staff also took into account the amount of relevant revenue during the period between 2011 and 2013, which were estimated at $102.87 million for TD and $124 million for RBC.

The OSC said TD’s payment was calculated as 10 per cent of the relevant revenue plus an additional $1 million for each year of conduct, but then applied a discount of 30 per cent for its early settlement and co-operation.


RBC’s payment was calculated with a similar methodology, but the lender received a 12 per cent discount for its co-operation.

Vingoe said Friday that both banks complied with the regulator’s probe, but noted that TD’s co-operation was “exemplary.”

The factors in the OSC’s decision to approve these settlements included efforts by both TD and RBC to improve their compliance and procedures, Vingoe said. He noted that RBC has since prohibited and shut down multi-dealer chatrooms, implemented training and implemented enhanced surveillance of electronic communication. He said TD, among other things, has engaged a third-party consultant to review its market-abuse controls.

The banks agreed as part of the settlements that their currency traders exchanged confidential information, such as the existence of stop loss orders, with traders at other financial institutions over a period between 2011 and 2013.

Both banks also agreed that they did not have a sufficient system of controls and supervision in place in relation to their foreign exchange businesses during that time.


However, neither lender admitted to a specific breach of securities law and OSC staff did not allege or have any evidence of market manipulation, OSC staff lawyer Cullen Price said.

Still, TD and RBC “failed to meet the high standards of conduct expected of a market participant, which potentially put its customers at risk,” said OSC’s vice chair Grant Vingoe during both hearings.

TD and RBC foreign currency traders were involved in several large chatrooms involving traders from other international banks, as well as bi-lateral chats, and OSC staff had identified “many hundreds of prohibited disclosures” between 2011 and 2013, the regulator said in its summary of the agreed facts.

“Participation in chatrooms with traders from other firms had a profit motive,” the OSC wrote.

For example, the OSC cited comments in a multi-dealer chatroom by a London-based TD FX trader who said “profit is profit” and “no-one ever got fired for making cash.” To another currency trader at another large Canadian bank, the same TD trader commented “u should be over 2 bucks up on my ideas and info this year” to another trader at a large Canadian bank.

In response to the comment, “mate the only reason you’re up this year is cause of my info,” an RBC trader replied “i agree ur tips hav been hot this year” the OSC wrote, as part of its agreed facts with RBC.

Paul Le Vay, a lawyer with Stockwoods LLP representing TD Bank at the hearing, said the lender has worked “continuously” over the last six years to remediate and improve its FX compliance and supervision program. He noted TD — Canada’s second-largest bank by market value — has since established a policy specifically for its currency traders.

“The bottom line is that TD’s supervision and controls environment for FX trading is quite different today than it was six to eight years ago,” Le Vay told the hearing Friday.

Lawrence Ritchie, a lawyer with Osler, Hoskin & Harcourt LLP representing RBC, said the bank admits that its supervision and controls during that period were “insufficient” to prevent foreign currency traders from disclosing and receiving confidential information to and from traders at other banks.

“RBC acknowledges that exchanging confidential information can cause risk, including a risk in the public confidence in the capital markets,” he told the OSC hearing.

Get more business in your inbox

Get the business news and analysis that matters most every morning in our Star Business Journal newsletter.

Sign Up Now

He added that RBC, Canada’s biggest lender by market value, is “committed to ensuring a strong culture of compliance.”

“This settlement, and the steps taken with staff to reach it, reflects these commitments,” Ritchie said.

Companies in this story: (TSX:TD, TSX:RBC)

Read More

Leave A Comment

More News


Ontario lowers its deficit from $11.7B to $7.4B, 2019-09-13 12:40:33

Financials help lift index in Toronto to record 2019-09-13 12:11:32

Can San Diego’s Brain Corp. become the Microsoft 2019-09-13 11:11:35Brain Corp. wants its software to become the common operating platform running the machinery of the autonomous mobile robot market. The competition is

Statistics Canada says household debt ratio edged lower 2019-09-13 11:01:44

Vaping illness in U.S. gives Canada pause as 2019-09-13 10:26:33Amid a serious lung illness affecting hundreds in the U.S. who vaped cannabis-based oil, British Columbia’s top health official says it’s

Pot’s illicit history makes patenting hard in the 2019-09-13 09:28:32Pot producers are struggling to turn intellectual property into patents, pointing to a broader issue in the pot sector.

BMO’s aim to double Indigenous lending relies on 2019-09-13 09:19:32The Toronto-based Bank of Montreal plans to double the size of its $4.4 billion book of Indigenous commercial loans, deposits and investments by 2025.

Canada’s stock market is just 23 points away 2019-09-13 09:05:32Benchmark S&P/TSX closes slightly higher at 16,643.28, paring a record high reached midday, as trade tensions between the U.S. and China showed si

Amazon starts crowdsourcing Alexa responses from the public. 2019-09-13 08:24:31Amazon made its Alexa Answer program available to the general public this week after several months of beta testing, opening up its artificial intelli

Gold investors see mergers and cost cuts unlocking 2019-09-12 22:48:26The Shareholders’ Gold Council of 18 investors found that the median spending of senior gold producers is double that of mining companies that p

End U.S.-China trade war now, finance ministers demand 2019-09-12 22:13:25The finance chiefs of Australia, Canada, Singapore and Indonesia warned that the post-war multilateral system was under threat in their statement in T

Will a U.S. ban on flavoured vaping products 2019-09-12 21:48:25Limiting access to flavoured e-cigarettes is a good strategy to stop some kids from getting hooked on nicotine, says one expert, but it raises the que

: Money

How quickly should you pay off your student 2019-09-12 13:54:05Sometimes, longer is better.

Canada’s big cities push political parties for policies 2019-09-11 07:41:07The issues are likely to draw more attention from politicians than in the past.

‘Limited’ data stalling Canadian policy-making on gig economy, 2019-09-09 10:20:40"Something's happening, we just don't know how to measure it properly," said one economist.

Retail giant takes over former Sears in Canada’s 2019-09-08 16:36:20A little over a year after retail giant Sears closed its doors for good in Canada, another major retailer is expressing confidence in the ongoing viab

The bank of mom and dad will lend 2019-09-07 07:00:36So-called family home loans are relatively common in the U.S. Canada's version of the arrangement is also becoming more popular, according to one B.C

By the numbers: How to reduce your debt 2019-09-07 06:00:40There are three main options: here's how they work.

Canada sees jobs surge in August with 81K 2019-09-06 08:54:17The gains were mostly in part-time jobs held by 15 to 24 year olds, while overall wage growth slowed.

Worsening of trade war would deliver a ‘complex 2019-09-05 12:30:53Economic growth has been accelerating, but uncertainty over trade is already taking a toll, Bank of Canada deputy governor Lawrence Schembri said.

Bank of Canada holds rates at 1.75% with 2019-09-04 10:21:37Canada's central bank said the economic damage from the U.S.-China trade war is worse than expected but did not mention the possibility of a future r

Air Canada files challenge with federal regulator over 2019-09-03 19:23:36Air Canada is challenging WestJet Airlines Ltd.'s $3.5-billion acquisition by Onex Corp., arguing in a filing to the country's transportation regula

RCMP, FBI two of four agencies investigating former 2019-08-29 09:46:34Ernst and Young, the accounting firm overseeing the Quadriga bankruptcy, is now asking for the proceedings to be moved from Halifax to Toronto.

Bill C-69 enters into law, and Alberta’s UCP 2019-08-29 00:48:07The federal government's contentious bill to set up a new authority to assess industrial projects like pipelines, mines and inter-provincial highways

Canada Business - The

Trudeau Pitches Tax On Foreign Buyers To Cool 2019-09-12 13:24:32VICTORIA — Justin Trudeau says a re-elected Liberal government would impose a national one per cent tax on properties owned by non-Canadians and

Apple TV Plus Announces Canadian Launch Date 2019-09-10 18:27:17TORONTO — As if there wasn’t enough to watch on TV already, Apple is throwing its hat into the streaming wars this fall, with a roster of

Mortgage Fraud May Be A Problem Among Canada's 2019-09-09 06:30:16Rising house prices and intense social pressure to own a home may be damaging young Canadians’ moral fibre, convincing them that it’s OK t

Canadian Real Estate Near Bottom Of Global Rankings, 2019-09-08 13:45:40A global housing slowdown is taking place, and Canada is nearing the very bottom of it.Canada placed 49th out of 56 national housing markets included

Chick-fil-A's Toronto Grand Opening Met With Protest From 2019-09-06 18:47:08Protesters crashed the grand opening of Chick-fil-A’s only Canadian location, sending a loud message that the company’s anti-LGBTQ history

Calgary Realtor Daniel Weiner Turns To Hockey Shootout 2019-09-06 18:44:40What started off as a standoff over $3,000 for a Calgary semi-detached home ended with a one-on-one hockey shootout.

Last 2 Zellers Stores In Canada Are Shutting 2019-09-06 14:44:57TORONTO ― Hudson’s Bay Co. says it will close the last two Zellers locations at the start of next year.A spokeswoman for the retailer says

Canada's Only Chick-fil-A Opens To Wave Of LGBTQ 2019-09-06 13:34:24TORONTO - Protesters crashed the grand opening of Chick-fil-A’s only Canadian location Friday, sending a loud message that the company&rsqu

Trade War Could 'Deliver A Complex Shock' To 2019-09-06 10:59:10The Canadian economy has shaken off the weakness seen at the start of the year, but escalating trade conflicts and related uncertainty are taking a to

Canada's Unemployment Rate Steady As Country Adds 81,000 2019-09-06 09:51:04OTTAWA ― Canada’s economy posted a job surge last month of 81,100 net new positions, the bulk of which were part time, in the services sec

Real Estate In Toronto, Vancouver Sees Another Month 2019-09-05 10:30:15Canada’s priciest housing markets, Toronto and Vancouver, continued their sales rebound in August, but while Toronto is seeing a return to moder

Doug Ford Government's Stickers Violate Free Speech, Lawsuit 2019-09-04 17:17:48TORONTO — An Ontario law forcing gas stations to display stickers showing the cost of federal carbon pricing is illegal and should be thrown out

CBC | Business News

European Central Bank introduces aggressive stimulus package to 2019-09-12 15:25:18European Central Bank chief Mario Draghi pledged indefinite stimulus on Thursday to revive an ailing euro zone economy, tying the hands of his success

United Auto Workers official charged with conspiring to 2019-09-12 15:14:16A senior member of the United Auto Workers (UAW) union was arrested Thursday and charged with conspiring with other union officials to embez

Top U.S. trade official submits USMCA ideas to 2019-09-12 11:18:01The Trump administration on Wednesday sent U.S. House of Representatives Democrats its latest proposals for addressing legislators' concerns about th

Corporate CEOs send letter to U.S. Senate, urging 2019-09-12 09:50:22More than 100 chief executives of some of the nation's most well-known companies on Thursday called on the U.S. Senate to take action to tackle gun v

U.S., China grant trade concessions as fresh talks 2019-09-12 09:48:16U.S. President Donald Trump on Wednesday welcomed China's decision to exempt some U.S. anti-cancer drugs and other goods from its tariffs and announc

Move over, little man in the top hat. 2019-09-12 04:00:00Hasbro Inc. is introducing Ms. Monopoly, with the toy and board game company calling her "an advocate whose mission is to reinvest in female entrepre

Spurned pot shop hopefuls going to Ontario court 2019-09-12 04:00:00A group of prospective cannabis retail store owners who won a lottery to apply for a licence in the burgeoning industry before later being disqualifie

Breaking down Canadians' questions about the cost of 2019-09-11 20:37:28How is the economy performing? What's the unemployment rate? Are interest rates going to go up? Why is it so expensive to rent?

California bill giving protections to Uber drivers, other 2019-09-11 14:51:08The California Assembly is expected to give final consideration Wednesday to a bill that would provide new wage and benefit protections to workers at

OxyContin maker, governments agree to tentative $12B deal 2019-09-11 11:07:08OxyContin maker Purdue Pharma reaches a tentative deal with about half the states and thousands of local governments over its role in the nation's de

33% of landowners on Trans Mountain route are 2019-09-11 10:41:47Thousands of landowners along the Trans Mountain pipeline expansion route have not yet granted the Crown corporation access. One homeowner in Abbotsfo

GM recalls nearly 3.8M pickups, SUVs to fix 2019-09-11 10:09:47Under pressure from the federal government, General Motors is recalling nearly 3.8 million big pickup trucks and SUVs in the U.S and Canada to fix a b

Christian Science Monitor |

Agricultural companies look to enter growing fake-meat market 2019-09-09 14:30:01Traditional agricultural companies are investing in the surging fake meat market, which some predict will triple in size over the next decade.

Volkswagen invests on new electric model. Will consumers 2019-09-09 12:16:38Carbon regulations are pushing EU auto companies to invest in electric vehicles, but so far only customers in wealthy countries are interested.

Why Albertsons says guns and grocery shopping don't 2019-09-09 05:45:46Supermarket operator Albertsons Companies joined Walmart, Kroger, and other retailers asking customers not to openly carry firearms while shopping.

China and industrial theft: What U.S. history says 2019-09-04 16:50:00The U.S.-China trade war ratcheted up Sept. 1 with new tariffs. Lessons from the U.S.’s commercial rivalry with Britain 200 years ago still reso

Capitalism under pressure: Why CEOs rethink corporate purpose 2019-09-03 16:16:00When 181 CEOs at the Business Roundtable’s revised their view of a corporation’s purpose, it reflected social changes since the Great Rece

Why carmakers are revving for regulation 2019-08-27 16:27:33A Trump proposal to scale back fuel efficiency standards has several key automakers siding with environmentalists in California.

The other economic trajectory: Global poverty in decline 2019-08-26 17:15:00Often the media focus on economic challenges, such as inequality and poverty. That’s important, but so is taking note of real progress.

As China trade war escalates, Iowa soybean country 2019-08-23 16:40:10For soybean farmers, weather is “an uncontrollable.” Now President Trump’s fight with China is, too.

Low interest rates are often a cure. Now 2019-08-16 17:16:00Amid warning signs of recession, economists are taking a look at the endemic circumstances that have brought the world to this point.

Disclaimer and Notice:WorldProNews.com is not responsible of these news or any information published on this website.