>>1. Oncology Pharma, Inc. Canaccord failed to report a significant volume of suspicious transactions in Oncology Pharma, Inc.’s common stock between January and August 2021. The transactions had an aggregate value of nearly $100 million. As described in public filings and other open-source information, Oncology Pharma, Inc. was a Nevada corporation that described its business as the licensing, development, manufacturing, and commercialization of therapeutic drugs and medical devices designed to treat many types of cancers. Oncology Pharma, Inc.’s common stock traded on the OTC market under the symbol ONPH. In March 2023, stock promoters Joseph A. Padilla and Kevin C. Dills were indicted on federal fraud charges for allegedly orchestrating a pump-and-dump penny stock scheme involving ONPH that generated over $150 million in illicit proceeds.44 Separately, in June 2023, the SEC charged Padilla and Dills for their roles in carrying out a fraudulent stock scheme involving ONPH. Both of these cases brought in 2023 revealed that during the period when Canaccord was trading ONPH, Padilla and Dills participated in a market manipulation scheme involving ONPH. Based on these cases, the scheme proceeded as follows: first, Padilla and Dills caused nearly all of ONPH’s free-trading shares to be transferred to multiple brokerage accounts for the benefit of Padilla’s clients at a Cayman Islands broker; second, beginning in January 2021, Padilla then engaged in manipulative trading to artificially drive up the price of ONPH; and finally, Padilla then began 44 Padilla subsequently pleaded guilty to securities fraud and other charges; Dills pleaded guilty to securities fraud. The SEC found that Padilla manipulated stock prices through trading activities in his own account and accounts belonging to family and friends that he controlled during periods of heightened investor demand driven by promotional activities such as email newsletters and online articles. The SEC’s cases against Padilla and Dills were resolved through judgments imposing disgorgement totaling over $1 million and, in the case of Dills, a civil penalty of over $200,000. 30 selling the ONPH shares (which were then trading at inflated prices due to Padilla’s manipulative activity) to unsuspecting victims. Despite its role as a market maker buying and selling millions of shares of ONPH, Canaccord failed to detect the following red flags of suspicious activity related to ONPH, including red flags related to manipulative trading.45 First, ONPH had the appearance of a shell company. Publicly available information reflects that the issuer’s name and business description changed abruptly in 2019, it had no operational history or revenue, and the audit report contained a going concern audit opinion reflecting doubt as to whether the company could continue operating. Second, publicly available information reflects that ONPH’s stock price increased by more than 250% during the month of January 2021 and again by more than 400% during February. Monthly trading volume increased four-fold from January to February 2021 and continued to grow through June. The stock price peaked at $50 on March 1, 2021, up from a low of $0.42 less than two months earlier on January 8, 2021. 45 See FINRA, Notice to Members 19-18 (May 6, 2019)(identifying “Potential Red Flags in Securities Trading,” to include “a sudden spike in investor demand for, coupled with a rising price in, a thinly traded or low-priced security”); FINRA, Notice to Members 21-03 (Feb. 10, 2021)(identifying “Potential Red Flags of Fraud Involving Low-Priced Securities,” to include issuers that are or were “currently or previously a shell company,” and “a spike in social media promotions (e.g., on Twitter, Instagram or Facebook), and activity on investor chat rooms or message boards.”); SEC, Risk Alert: Compliance Issues Related to Suspicious Activity Monitoring and Reporting at Broker-Dealers (March 29, 2021) at 4–5 (incorporating by reference a 2014 SEC Risk Alert and observing that some broker-dealers did not review activity and follow up to consider filing a SAR when certain red flags set forth in the prior 2014 Risk Alert were present, including “[t]rading in thinly traded, low-priced securities that resulted in sudden spikes in price or that represented most, if not all, of the securities’ daily trading volumes” and “[t]rading in the stock of issuers that were shell companies.”) No single red flag is determinative of illicit or suspicious activity. Financial institutions consider the surrounding facts and circumstances, such as a customer’s historical financial activity, whether the transactions are in line with prevailing business practices, and whether the customer exhibits multiple red flags, before determining if a behavior or transaction is suspicious. 31 Finally, publicly available information reflects that ONPH was the subject of Internet discussions throughout the spring and summer of 2021 indicative of fraudulent promotional activity. Canaccord failed to investigate these red flags and failed to timely file a SAR regarding this activity
Market Data 
Markets 
