Former RBC and Scotia adviser lands in regulatory crosshairs for third time

A former adviser at RBC Dominion Securities Inc. and Scotia Capital Inc. is purported to have “impersonated his clients” in a firm he soon started after settling disciplinary actions regarding the his work at  the 2 major banks.

The Ontario Securities Commission says Mark Steven Rotstein and the new firm Equilibrium Partners Inc. (EQ) obtained personal and company information from clients, including their passwords, and then communicated with market participants to be able to execute buy and sell orders for clients. 

“During many of these communications, Rotstein impersonated his clients,” the OSC alleges in a statement of allegations published Tuesday.

“In so doing, he repeatedly misled market participants as well as their employees, in order to conduct activity for which he and EQ should have been, but were not, registered.”

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A hearing in to the matter would be to occur March 24 in the OSC’s headquarters in Toronto. No allegations have been proven.

Canada’s biggest capital markets regulator says Rotstein and EQ breached securities rules by engaging “in the process of exchanging and advising according of securities without being registered.”

The regulator says the Toronto man and the firm completed more than 500 transactions for and with clients, having a settlement value exceeding $14,450,000, between July 2, 2013, and Oct. 4, 2014.



Before starting EQ, Rotstein worked for RBC Dominion Securities from 1997 until he was terminated for cause in April of 2011. At his peak, he’d roughly 2,000 client accounts with assets worth about $500 million, according to the OSC. 

He joined Scotia Capital exactly the same month he was release by RBC, and subsequently settled the allegation through an investment Industry Regulatory Organization of Canada in connection with his work on RBC.  Within the settlement, Rotstein “admitted he had engaged in a practice, for more than ten years, of signing client names and passing those signatures off as the clients’ on account and investment documents, in dozens and potentially hundreds of instances,” based on the OSC.

Among other things, Rotstein, who had been required to work under close supervision at Scotia, decided to pay a fine of $250,000.

However, he was asked by Scotia to resign in July of 2012, and IIROC subsequently brought another proceeding against him in connection with his work there. In June of 2012, he settled the 2nd IIROC proceeding with an admission that he had entered a trade for any client without the client’s knowledge or authorization, according to the OSC.

His departure from Scotia “resulted within the automatic suspension of his registration,” the OSC document says, and Rotstein was prohibited in the July 2014 settlement from registering with IIROC for a period of 1 . 5 years.

In the big event that his registration ended up being to be reactivated, he agreed he would be subject to strict supervision and to conditions and terms regarding his documentation. The earliest he was eligible for registration was Jan. 3, 2016.  

However, the OSC says Rotstein had incorporated EQ by the time the second settlement with IIROC was accepted in July 2014, and alleges he and also the firm “had been engaging in unlawful trading and advising for any year.”