Canaccord Genuity Settles With U.S. Regulators to Resolve Enforcement Actions

By Robb M. Stewart

Canaccord Genuity reached an $80 million settlement with U.S. regulators to bring to a close enforcement actions over the failure to file certain suspicious activity reports over a three-year period.

The Canadian company's U.S. broker-deal subsidiary entered the agreements with the U.S. Securities and Exchange Commission, Financial Industry Regulatory Authority and the Financial Crimes Enforcement Network.

The settlement includes $5 million that will be suspended pending the delivery of a satisfactory suspicious activity reporting lookback review, Canaccord Genuity said. It forecast the financial impact to be about $75 million, though it said it doesn't expect the settlement to have any material effect on its financial position or the results of its operations.

Michael Auerbach, lead independent director at Canaccord Genuity, said the company's board was satisfied the regulatory matters were resolved and that the underlying conduct was in the past.

The company said it has over the past three years undertaken a comprehensive transformation of its compliance framework to address the failings and to better align with regulatory expectations. This includes wholesale change in compliance leadership and an increase in supervisory personnel and compliance staffing, as well as updated surveillance reports and new surveillance tools.

Canaccord Genuity's core U.S. investment banking, mergers and acquisitions and advisory, equity underwriting, private placement, and equity research businesses weren't implicated and the company said all operations in these areas remain fully active and unaffected.

The SEC in a filing said Canaccord made an offer of settlement in anticipation of administrative and cease-and-desist proceedings the commission was bringing against the company.

The matter relates to the failure to file some suspicious activity reports in connection with Canaccord's equity-trading businesses from February 2019 through March 2022. The company as a market maker and broker in exchange-listed and over-the-counter securities was required to submit reports it knew, suspected or had reason to suspect of any transaction involving fraud or that had no business or apparent lawful purpose.

The SEC in its claim said Canaccord failed to file about 150 reports on suspicious transactions including spikes in trade volume and price in thinly traded or low-priced securities and sales patterns indicative of "pump-and-dump" schemes.

The commission said that in agreeing to accept the settlement offer, it considered remedial acts undertaken by Canaccord had undertaking. The settlement includes a civil money penalty of $20 million that is to be paid to the SEC or transfer to the general fund of the U.S. Treasury.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

March 06, 2026 10:28 ET (15:28 GMT)