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Canadian Broker Group Inadvertently Posts Complaints List

 

By Doug Alexander

Jan. 30, 2007 (Bloomberg) -- The Investment Dealers Association of Canada, the self regulator for the securities industry, inadvertently published details of complaints against more than 2,000 brokers on the Internet for about 16 months.

The association posted the information on its Web site in September 2005 and removed the list of brokers' names on Jan. 26 after an IDA employee discovered the oversight, said Alex Popovic, vice president of enforcement.

The incident was reported today in the Toronto Star after the newspaper interviewed Robert Kyle, a former broker who runs a Web site critical of self-regulatory organizations in Canada's securities industry.

"We've had no complaints, the information is typical of the type of information that's available in the U.S.'' on the Central Registration Depository, Popovic said today in an interview. "The reason we took it off the site is we feel this type of information can be easily misinterpreted.''

The information came from ComSet, a database the IDA uses to gather information about criminal complaints, civil claims, internal investigations, and complaints from regulators and customers against a broker, Popovic said. The IDA monitors the information to see if the complaints are valid and whether there's a regulatory breach it needs to investigate.

Complaints may be unfounded, Popovic said, and "people are judged to be innocent until proven guilty.''

Kyle, a disbarred broker who was fined by the IDA for not cooperating in an investigation in the 1990s, says the database shows the IDA isn't doing enough enforcement.

Kyle said he sent the list to the Royal Canadian Mounted Police and Toronto Police Service's fraud squad and he plans to publish the information on his own Web site.

"My key issue is for the investors' safety,'' he said. "They should be able to do due diligence and have greater knowledge when they sign up with a broker. If the IDA says, well, these are just frivolous complaints, why are they in this database?''

IDA is reviewing the incident and has changed the way it posts information on its Web site, Popovic said.

To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net

Last Updated: January 30, 2007 11:54 EST

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