Scotiabank fined $1M by regulator after staff fiddled with sales numbers | iNFOnews | Thompson-Okanagan's News Source

Would you like to subscribe to our newsletter?

Vernon News

Scotiabank fined $1M by regulator after staff fiddled with sales numbers

Image Credit:

An investment firm owned by the Bank of Nova Scotia has been fined $1 million and ordered to pay $10.8 million to customers in compensation following a series of errors whereby some staff members fiddled with their sales numbers.

According to a Dec. 19 Mutual Fund Dealers Association of Canada decision, Scotia Securities agreed to pay a $1 million fine along with $75,000 in cost in a settlement with the regulator.

In the course of the investigation, some staff members resigned while others were fired for fiddling with their sales stats.

The regulator found the bank had made six contraventions of the mutual fund dealer's regulations.

While some of the infractions meant staff benefited, other infractions in the way staff members processed accounts left some customers short-changed while other customers benefited.

The decision said that between November 2017 and January 2020, nearly 50 staff members processed 757 transactions incorrectly which delayed the processing time and opened customers up to risk.

"Some clients suffered losses as a result of the delay caused," the decision read. "Conversely, some clients also benefitted from gains."

The regulator found the bank had "deficiencies" in its policies and procedures that incentivized staff to purposely process the transactions incorrectly to earn more commission.

The decision said some staff had an honest misunderstanding of how to process transactions, while others acted intentionally.

Eight staff members resigned before the investigation began, while dozens more were given written warnings.

The bank admitted it hadn't trained staff fully train or put in safeguards.

"It failed to implement adequate policies and procedures and an adequate system of controls and supervision," the decision read.

The regulator found that almost 10,000 clients had been affected and needed to be compensated $3.7 million.

Along with various other staff actions that didn't impact customers financially, the regulator also found Scotia Securities had delayed issuing redemption cheques to its clients.

The regulator found more than 800 customers affected to the tune of $740,000.

In total, the bank was ordered to pay $10.8 million to its customers in remediation.

To contact a reporter for this story, email Ben Bulmer or call (250) 309-5230 or email the editor. You can also submit photos, videos or news tips to the newsroom and be entered to win a monthly prize draw.

We welcome your comments and opinions on our stories but play nice. We won't censor or delete comments unless they contain off-topic statements or links, unnecessary vulgarity, false facts, spam or obviously fake profiles. If you have any concerns about what you see in comments, email the editor in the link above. 

News from © iNFOnews, 2022

  • Popular vernon News
View Site in: Desktop | Mobile