Enforcement Notice
Please distribute internally to:
Decision
Legal and Compliance
Contact:
Warren Funt
Vice President, Western Canada
604 331-4750
wfunt@iiroc.ca
Elsa Renzella
Director, Enforcement Litigation
416 943-5877
11-0060
erenzella@iiroc.ca
February 9, 2011
IN THE MATTER OF Patrick Cooney and Jory Capital Inc. – Penalty
Following a disciplinary hearing held November 2-4, 2010, in Winnipeg, Manitoba, a Hearing
Panel of the Investment Industry Regulatory Organization of Canada (IIROC) found that
Patrick Cooney (Cooney) and Jory Capital Inc. (Jory) committed violations of IIROC Rules and
of the Universal Market Integrity Rules (UMIR).
Specifically, the Hearing Panel found that Cooney committed the following violations:
(a)
Cooney, the Chief Executive Officer, President, and sole director of Jory, failed to ensure
that Jory design, establish, oversee, and implement an effective financial compliance
program
to
ensure
proper
compliance
with
regulatory
requirements
regarding
maintenance of adequate risk adjusted capital (RAC), monitoring of regulatory capital,
and reliability of financial reporting, contrary to Rules 29 and 2600.
(b)
Cooney failed to ensure that Jory establish, maintain, and enforce a supervisory system
contrary to Rule 38.
(c)
Cooney failed to ensure that Jory develop and implement a trade supervision policy as
required by Universal Market Integrity Rules (UMIR) 7.1.
(d)
Cooney engaged in conduct unbecoming by failing to ensure that Jory fulfill
representations provided to IIROC, contrary to Rule 29.1.
The Hearing Panel found that Jory committed the following violations:
(a)
On January 24, 2008, Jory failed to maintain its RAC greater than zero, contrary to Rule
17.1.
(b)
On October 9, 2009, IIROC required Jory to retro-actively recalculate its RAC resulting in
Jory failing to maintain its RAC greater than zero, during the months of June to October
2009, contrary to Rule 17.1.
(c)
On April 14, 2010, Jory failed to maintain its RAC greater than zero, contrary to Rule
17.1.
The Decision and Reasons on Liability dated November 12, 2010 can be found at
http://docs.iiroc.ca/DisplayDocument.aspx?DocumentID=6EE9541419B342A98DF6D6ECDB69C11E&Language=en
Following a penalty hearing held on January 18, 2011, the Hearing Panel imposed the
following penalty on Cooney:
(a)
A fine of $100,000; and
(b)
A permanent ban from registration in all capacities with the exception of registered
representative, investment representative or trader.
Cooney must pay $40,000 in Costs.
The following penalty was imposed on Jory:
(a)
A fine of $40,000 per RAC deficiency, for a total of $120,000;
(b)
Jory must retain a compliance consultant for at least one year.
Jory must also pay $10,000 in Costs.
The Decision and Reasons on Penalty dated January 28, 2011 can be found at
http://docs.iiroc.ca/DisplayDocument.aspx?DocumentID=1D36D46105334E908543BAFC1929F446&Language=en
Jory and Cooney have indicated that they intend to appeal the Penalty Decision to the
Manitoba Securities commission.
IIROC formally initiated the investigation into Cooney and Jory’s conduct on September 28,
2009. The violations occurred when Cooney was an Approved Person at Jory’s office in
IIROC Notice 11-0060 – Enforcement – Decision – In the Matter of Patrick Cooney and Jory Capital Inc. – Penalty
2
Winnipeg. Cooney continues to be an Approved Person at the same office. Jory is an IIROC-
regulated firm.
The Notice of Hearing is available at
http://docs.iiroc.ca/DisplayDocument.aspx?DocumentID=015281646AFD44029F89B12BD7B4BB0A&Language=en.
IIROC is the national self-regulatory organization which oversees all investment dealers and
trading activity on debt and equity marketplaces in Canada. Created in 2008 through the
consolidation of the Investment Dealers Association of Canada (IDA) and Market Regulation
Services Inc. (RS), IIROC sets high quality regulatory and investment industry standards,
protects
investors
and
strengthens
market
integrity
while
maintaining
efficient
and
competitive capital markets.
IIROC carries out its regulatory responsibility through setting and enforcing rules regarding
the proficiency, business and financial conduct of dealer firms and their registered employees
and through setting and enforcing market integrity rules regarding trading activity on
Canadian equity marketplaces.
IIROC Notice 11-0060 – Enforcement – Decision – In the Matter of Patrick Cooney and Jory Capital Inc. – Penalty
3
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.