Royal Bank of Canada (TSE:RY) fired the head of the equity syndicate over failure to follow compliance guidelines. According to people familiar with the matter, John Reed, the Managing Director of the Equity Capital Market arm of RBC, was found to have made improper communications involving the business, which led to his ouster.
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Reed’s dismissal is a part of Wall Street regulators’ clampdown on financial firms and banks, calling for strict monitoring of employee communications involving the business on unauthorized messaging applications. Collectively, the institutions have been fined more than $2 billion so far for compliance violations.
Earlier this year, a senior equity capital markets banker at Credit Suisse (NYSE:CS) was ousted for a similar compliance failure. Reed’s departure is not likely to affect RBC’s goodwill.
Is RY Stock a Buy?
Wall Street is cautiously optimistic about RY stock, with a Moderate Buy rating based on seven Buys and three Holds. The average price target of C$143.39 indicates a 6.48% upside to current levels over the next year.
