The Alberta Securities Commission (ASC) has ordered two individuals to pay nearly $2 million in sanctions for breaching securities law in the province. Glenn Hunter and Kyle Watters, along with their firms, HW & Associates Inc. and HW TradeFX LLC, were found to have engaged in trading on behalf of investors without being registered as dealers.
The ASC panel ruled that they raised around $20 million from investors in Alberta, British Columbia, and Saskatchewan between February 2021 and 2023. Most of the investors lost most of their money due to the failed foreign exchange trading, with approximately $1.8 million returned to investors.
Following a hearing on sanctions, the panel ordered Watters to disgorge over $1 million, pay a penalty of $150,000, and costs of $15,000. He was also banned from the markets for 20 years.
Hunter was banned for 16 years, ordered to disgorge $600,000, pay a penalty of $125,000, and costs of $15,000. The two companies, HW & Associates Inc. and HW TradeFX LLC, were permanently banned from operating in the markets.
The panel’s decision noted that ASC staff had sought $300,000 penalties against both men, along with disgorgement and 20-year market bans. However, the panel found that Hunter and Watters were not equal participants in the failed scheme.
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Although they were equally to blame for engaging in misconduct, the panel concluded that Watters was clearly dominant in the actual trading and in the amount of money raised from investors. As a result, the panel ordered somewhat less severe sanctions against Hunter.
The panel noted that he was less involved in the scheme and less likely to engage in such trading on his own. The panel also found that the pair benefited from their misconduct, with Trade FX receiving about $1.77 million in trading commissions.
The panel concluded that their misconduct was very serious due to its nature and extent, and the harm caused to specific investors and the capital market. The pair likely didn’t set out to breach securities rules.
The panel considered the need for considerable specific and general deterrence when imposing sanctions. It also took into account that both Hunter and Watters are facing financial difficulties.
This resulted in lower monetary penalties than ASC staff had sought. According to the Alberta Securities Commission, the sanctions imposed on Hunter and Watters are intended to reflect the seriousness of their misconduct and to deter others from engaging in similar activities.
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