OSC accuses Caldwell Investment of ‘conflict of interest’
Ontario Securities Commission staff has taken aim at Caldwell Investment Management (CIM), alleging the firm misled clients and breached provincial securities law by not trading on their behalf at the lowest possible cost.
The regulator's staff says CIM clients overpaid for trades for almost four years between January 2013 and November 2016 because CIM didn't live up to best execution requirements by steering trades through Caldwell Securities.
According to the 14-page statement of allegations, that placed Caldwell "in a clear conflict of interest."
"Notwithstanding the conflict of interest, CIM had inadequate policies and procedures in place to ensure that it sought best execution for its clients," the statement of allegations reads.
"CIM did not have an adequate process in place to ensure that it was obtaining the most advantageous execution terms reasonably available under the circumstances for its clients. CIM also did not regularly evaluate whether best execution was obtained for its clients.”
OSC staff is asking the commission to order Caldwell to pay up $1 million for each breach of securities law and terminate, suspend or restrict Caldwell Investment Management's registration for an unspecified period.
“Caldwell Investment Management Ltd. has been in discussions with OSC Staff for some time and has been working to resolve the issues," a spokesperson for CIM said in a statement. "Caldwell Investment Management Ltd. will have no further comment for the time being.”
The OSC is scheduled to hold a hearing on the matter on July 3.