Seven Canadian financial services firms will pay nearly $163 million (C$200) to settle charges that they permitted preferred customers to engage in rapid short-term trading in their funds at the expense of long-term shareholders, Reuters reports.
The Ontario Securities Commission, the nations chief regulator, approved a C$156.5 million settlement with the four largest fund managers. Under the terms of the deal, CI Fund Management will pay C$49.3 million, AGF Fund Management will pay C$29.2 million, I.G. Investments will pay C$19.2 million and privately held AIC Ltd. will pay C$58.8 million.
The fines will be distributed to investors as restitution for abusive market timing that fund managers allowed between 1998 and 2003, according to the settlement. The OSC deemed their behavior a "clear violation of the principles of fairness to clients."
In a separate agreement, the brokerage arms of three of Canadas largest banks agreed to pay C$41.4 million for failing to implement systems to curtail market timing in 2002 and 2003. Royal Bank of Canada will pay C$17 million, Bank of Montreal will pay C$3.7 million and Toronto- Dominion Bank will pay C$20.7 million
Meanwhile, the Canadian arm of Franklin-Templeton Investments, a unit of U.S. fund manager Franklin Resources, said last week that is under investigation by the OSC and that the regulator was mulling proceedings.