RBC Capital Markets Faces Massachusetts Claim Over Fund Sales
Stock Chart for Royal Bank of Canada (RY)
RBC Capital Markets, the securities unit of Royal Bank of Canada (RY), inadequately supervised sales of leveraged and inverse-leveraged exchange-traded funds to clients, Massachusetts’s chief financial regulator said.
The firm made the funds available without training employees or ensuring they understood the products’ function and risks from at least January 2007, the state’s secretary of the commonwealth, William Galvin, said today in a statement, announcing an administrative complaint against the company and a former broker.
“The dishonesty here is that the investors, and indeed the agent soliciting their investment, did not understand the workings of these funds,” Galvin wrote. “The firm failed in its responsibility to train and supervise its agent, and this failure led to investor harm.”
The state is seeking restitution for Massachusetts investors and a fine, Galvin said.Katherine Gay, a spokeswoman for Royal Bank, said she couldn’t immediately comment.
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