Administration March 7, 2002

STREET SWEEP – Canadian Regulators Descend on Fund Managers

July 27, 2000 (PLANSPONSOR.com) - Canadian securities regulators have initiated a "street sweep," demanding trading records from pension systems and mutual fund companies. The action comes in the wake of a stock manipulation scandal at RT Capital, the pension management unit of Royal Bank of Canada.

Reported by

Nevin E. Adams

The British Columbia Securities Commission (BCSC) has asked fund managers for trading records covering six separate days between last December and this June, as well as tapes or transcripts of taped discussions about stock transactions, according to the Globe and Mail newspaper.

Regulators in Alberta and Ontario have requested similar information from fund managers as part of a coordinated crackdown on illegal stock trading.

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Date Trading

The BCSC is reportedly asking for a list of accounts and holdings at December 31, March 31 and June 30, as well as transactions that occurred on December 30 and 31, March 30 and March 31 and June 29 and June 30.

All documents are to be turned in by next Friday, according to the report.

“While the review is under way I really can’t provide you with any comment,” Langley Evans, deputy director of enforcement at the BCSC and author of the letters in British Columbia told the Globe and Mail.

Last month, the Ontario Securities Commission accused RT Capital Management Inc., the Royal Bank’s pension arm, of manipulating the closing price of 26 stocks over eight days in late 1998 and early 1999.

Personnel were accused of “high-closing,” a practice that artificially inflates the price of a stock at the end of a trading day, distorting fund performance on key dates, such as quarter-end.

RT Capital settled with the OSC last week, accepting a $C3-million fine and a number of employee sanctions. They were also forced to reinstall a system that recorded calls between portfolio managers and traders. The system was removed in September 1999.

See related article: TAMPER-PROOF? RT Capital Settles Tampering Charges