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NEW JERSEY IN $450,000 SETTLEMENT WITH RBC CAPITAL MARKETS

(The following is a reformatted version of a press release
issued by the New Jersey Division of Consumer Affairs and
received via electronic mail. The release was confirmed by the
sender.) 
March 13, 2013 
New Jersey Division of Consumer Affairs Announces Settlement
with Canadian Investment Bank -- RBC Capital Markets Agrees to
$450,000 Settlement with Bureau of Securities for Failing to
Review Accounts Used in Multi-Million Dollar Ponzi Scheme 
NEWARK - RBC Capital Markets, LLC, a Canadian investment bank,
has agreed to a $450,000 settlement with the Division of
Consumer Affairs’ Bureau of Securities for failing to perform
required reviews of accounts held by convicted securities
fraudster James Hankins, Jr. 
RBC failed to follow its own procedures by not performing
Monthly Account Reviews on accounts opened by Hankins, according
to the Consent Order between RBC and the Bureau. By March 2006,
the required monthly reviews of Hankins’ accounts were reported
as overdue between 162 and 253 days. Hankins used those accounts
to perpetrate a multi-million dollar Ponzi scheme. 
The Bureau sued Hankins in 2008 and obtained a default judgment
that permanently barred Hankins from the State’s securities
industry and ordered the payment of $7 million in restitution
plus $220,000 in civil penalties. Hankins pled guilty to
criminal charges resulting from his Ponzi scheme and is
currently serving a 20-year prison sentence. 
“RBC failed to follow its own procedures that are designed to
monitor account activity. In this case, the bank’s failure may
have cost investors severely.  We will not allow such laxity to
go unpunished,” Attorney General Jeffrey S. Chiesa said. 
RBC will pay $300,000 in disgorgement to the Bureau, which will
be distributed to Hankins’ investors. The remaining $150,000 is
a civil penalty, with $50,000 payable to the Bureau and $100,000
suspended due to RBC’s cooperation with the State. 
“Proper supervision is a critical function that broker-dealers
are obligated to perform under our state Securities law. Failure
to supervise removes an important safeguard that investors count
on to protect their hard-earned monies. The Bureau of Securities
will take action, as it did in this matter, when broker-dealers
don’t adhere to the law or their own protocols,” said Abbe R.
Tiger, Chief of the New Jersey Bureau of Securities. 
On August 25, 2009, the Court entered Final Judgment by Default
against Hankins and the Hankins Entities where the Court found
the defendants, among other things, operated a course of
business that included misappropriating investor funds for
personal expenses, using new investor money to pay old
investors, operating as a fraud and collecting over $19 million
from investors, nearly all New Jersey residents. 
Rudolph Bassman, Chief of Enforcement, and Investigator Sylvia
Kolankiewicz of the Bureau of Securities conducted the
investigation of this case. Deputy Attorney General Victoria A.
Manning in the Securities Fraud Prosecution Section of the
Division of Law represented the State in this action. 
The Bureau of Securities can be contacted toll-free within New
Jersey at 1-866-I-INVEST (1-866-446-8378) or from outside New
Jersey at 973-504-3600. The Bureau’s website is located at
www.njsecurities.gov . 
Contact:
Jeff Lamm, (973) 504-6327
Neal Buccino, (973) 504-6327 
(bjh) NY 
#<873920.660640.3.4.1.0.76>#
 
 
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