- IIROC Enforcement Proceedings
- July 10, 2014 | Author: Maureen Doherty
- Law Firm: Borden Ladner Gervais LLP - Toronto Office
Branch Manager: Admissions Regarding Failure to Supervise for Suitability
Earl Jessiman, Decision 14-0131
A branch manager reached a settlement agreement with IIROC whereby he agreed to a fine of $20,000, $2,000 in costs and a 12 month suspension from acting in any supervisory capacity.
He had been a longstanding branch manager of an investment advisor who, following an IIROC disciplinary hearing, was found to have made unsuitable recommendations.
The branch manager’s admissions related to the activities in one joint margin account of a couple aged 47 at its inception and which included family lottery winnings. The Branch Manager admitted that he failed to adequately supervise. The activities in the joint margin account were described as over concentrated in income trusts, energy and resource with “excessive” high risk and margin.
He admitted that the new client application forms did not adequately reflect the risk of the investments in the margin account, though based upon the risk ratings applied by IIROC staff. He also admitted to not adequately questioning the investment advisor regarding the margin account and not providing sufficient documentary evidence that he questioned him.
Investment Advisor: Admissions Regarding Unsuitable Investments
Scott Bateman, Decision 14-0147
An investment advisor reached a settlement agreement with IIROC whereby he agreed to a fine of $20,000, $2,000 in costs and a rewrite of the CPH.
The settlement concerned the account of one individual who had been a client since 2002 and had followed the investment advisor from another dealer. The relevant time period is nonetheless defined as a thirteen month period beginning in March, 2008 and ending June, 2009 and therefore including the market crash.
It was admitted that as at March 31, 2008, the client’s account was 98% high risk due to various purchases of Horizons Beta S&P Gold Bull (HGU”), Active Control Tech. Inc. and Appleton Exploration Inc. As at that time, the new client application form provided for 50% high risk which was changed to 100% high risk in July, 2011 (presumably outside the relevant time period). It was also admitted that recommendations to hold HGU in particular after it had dropped significantly in value were not suitable.