- OSC alleged Caldwell violated best execution obligations in equity and bond trades.
- Caldwell ordered to pay $1.8mn penalty, half on Jul. 19, 2019 and rest in Apr. 2019.
- It must also reimburse OSC $250k for its investigation into its compliance failures.
- Firm will be subject to independent consultant/monitor, approved by OSC, to review and test new best execution procedures, and report to OSC, at Caldwell's expense.
Best Execution Gaps
- Caldwell failed to comply with best execution requirement to execute trades for clients on the most advantageous terms reasonably available under the circumstances.
- Instead, from 2013 to 2016, it directed most client trades through its own related investment dealer, despite unaffiliated dealers with better commission rates, spreads.
- Admitted having inadequate policies and procedures relating to best execution, made misleading statements in the annual information forms for two of its mutual funds.
- Also, provided insufficient and inaccurate data to the independent review committee.