CIRO hands Toronto dealer exec rare permanent UDP ban after US$1.4 million loss
a non‑arm’s length client account did not have enough margin to support the trading
large UPRO positions and losses sat unallocated in the dealer account while NBIN, Hampton’s carrying broker, bore the
credit risk
after February 24, 2020, UPRO trades remained in the dealer account, and a sharp market drop led to a loss of more than $1.9m, followed by a US$1.419m realized loss when NBIN liquidated the position
The panel described this pattern as improper access to credit and found that it fell below the high standards of ethics and conduct required of a regulated person.
Second, the panel found that Hampton failed to keep and maintain a proper system of books and records and to provide records of trading activity, contrary to Dealer Member Rules 17.2 and 200.
CIRO staff could not obtain basic audit‑trail documents for the UPRO trading from Hampton and had to reconstruct the activity using records from NBIN and Credit Suisse.
The panel also found that Hampton’s Monthly Financial Reports for February and March 2020 did not reflect the UPRO losses and related margin, and that the firm would have been risk adjusted capital (RAC) negative for much of that period if it had done so.
Third, the panel concluded that between January and September 2020, Deeb failed to promote compliance by Hampton with regulatory requirements, in breach of Dealer Member Rule 38.5.
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