SEC charges Canaccord Genuity LLC with deficient due diligence on dozens of OTC stocks
The Securities and Exchange Commission charged Canaccord Genuity LLC, a broker-dealer headquartered in New York City, on Wednesday with quoting and making a market in dozens of U.S. over-the-counter securities without conducting the legally-required review that protects investors. According to the SEC's order, Canaccord published quotes and made markets in dozens of OTC securities without establishing a reasonable basis via diligent review that the prospectus and other information made available by the issuer of the securities was accurate. Canaccord allegedly delegated the responsibility to obtain and review the information required by law and to fill out and sign the necessary forms demonstrating compliance with the rule to a compliance associate who had no trading experience and no formal training such as analysis of financial statements and other information. As a result, Canaccord allowed dozens of OTC securities to be traded in U.S. markets without conducting the review required to protect investors. Without admitting or denying the SEC's findings, Canaccord consented to a cease and desist order and a censure and agreed to pay a $250,000 penalty. Canaccord has since revised and improved its policies and procedures , according to the SEC's complaint.
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