Alberta Securities Commission Sanctions Unregistered Forex Operators

The operators of an unregistered offshore firm that violated securities law in Alberta have been ordered to pay nearly $2 million in sanctions by a regulatory hearing panel of the Alberta Securities Commission (ASC).

Last year, an ASC panel determined that Glenn Hunter and Kyle Watters, together with their companies HW & Associates Inc. and HW TradeFX LLC, contravened securities regulations by conducting trading for investors without proper dealer registration.

The panel found that they raised approximately $20 million from investors across Alberta, British Columbia, and Saskatchewan between February 2021 and 2023, and that the majority of investors suffered substantial losses from the failed foreign‑exchange trading. The panel noted that about $1.8 million was subsequently returned to investors.

Following a sanctions hearing, the panel ordered Watters to disgorge more than $1 million, pay a $150,000 penalty and $15,000 in costs, and to be barred from the markets for 20 years.

Hunter received a 16‑year market ban, was required to disgorge $600,000, pay a $125,000 penalty, and $15,000 in costs.

Both companies were permanently barred.

ASC staff had initially sought $300,000 penalties against both individuals, together with disgorgement and 20‑year market bans; however, the panel concluded that the two were not equally involved in the scheme.

‘Although Hunter and Watters bore equal responsibility for the misconduct and their intentions, we determine that they were equal in name only,’ the panel stated. ‘Watters was clearly dominant in the actual trading as well as in the amount of money raised from investors.’

Consequently, the panel imposed less severe sanctions on Hunter, recognizing his smaller role and lower future risk.

The panel acknowledged that the duo likely did not set out to breach securities rules, but determined that their conduct was ‘very serious due to its nature and extent … and the harm caused to specific investors and the capital market.’

The panel also found that they benefited from misconduct through Trade FX receiving approximately $1.77 million in trading commissions, though much of that amount was lost in failed trades.

It further observed that, although their conduct would typically merit higher penalties, both individuals are experiencing financial hardship, resulting in reduced monetary penalties.

‘Overall, the sanctions imposed on Hunter and Watters — and, by extension, the corporate respondents — must reflect the need for substantial specific and general deterrence, although a lesser degree is warranted for Hunter,’ the panel concluded.

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