Nov. 14, 2008
SAINT JOHN (CNB) - An order approving a settlement agreement between New Brunswick Securities Commission (NBSC) staff and Legacy Associates Inc. (Legacy) of Hampton has been issued by a panel of the NBSC. Under terms of the agreement, Legacy is subject to a number of limitations on its operations as a result of non-compliance with New Brunswick securities law. It will also pay an administrative penalty of $15,000 for past non-compliance, plus $5,000 in costs for a previous compliance review.
The order requires Legacy to appoint a new lead compliance officer, submit to an independent review of its practices, not register any additional mutual fund salespersons, refrain from entering into any new referral arrangements, and not trade in exempt securities until a further order from the NBSC.
Legacy has been subject to several compliance reviews which identified areas of regulatory non-compliance. Further reviews revealed that deficiencies continued; NBSC staff decided that enforcement action was required. Legacy responded immediately to the action, and demonstrated a willingness to co-operate to achieve compliance.
Legacy acknowledged that it has not committed sufficient resources to meeting regulatory obligations as a registered mutual fund dealer. Improper record keeping, incomplete and insufficient know-your-client information and documentation, and inadequate supervision of client communication, among others, were identified as areas of non-compliance.
"Securities regulation is in place to protect investors," said Rick Hancox, executive director of the NBSC. "Our objective is to ensure that all registrants comply with the Securities
"It is critical for advisers to follow proper procedure when obtaining new clients and completing accurate know-your-client information to ensure that the client's needs are being met. It is essential that all investors ensure that their adviser knows their current financial status, risk tolerance and investment objectives so that they can receive appropriate advice."
Legacy clients should contact the company directly if they have any questions or concerns. NBSC compliance staff will continue to review Legacy's operations to ensure that all proper measures have been taken.
Legacy is one of three mutual fund dealers headquartered in New Brunswick.
MEDIA CONTACT: Michelle Robichaud, communications officer, New Brunswick Securities Commission, 506-643-7045.