The Canadian Investment Regulatory Organization (CIRO) has imposed sanctions on Benjamin Thomas Banks, after the dealing representative implemented a dollar cost averaging strategy for clients, without asking clients which specific dates they wanted to have their trades processed.

Banks is also being sanctioned for failing to verify, in person, trades sent to him by email, and for failing to record client trade instructions.

Specifically, the Calgary, Alberta representative, registered in the securities industry since January 2000, engaged in discretionary trading between July and November 2020 and failed to take adequate notes and verify trading instructions for three clients between January 2020 and May 2021. The discretionary trading included 11 mutual fund switches, 22 transactions in total, for three clients, without first obtaining instructions about timing.

“The respondent had initial discussions with and obtained instructions from the clients about this strategy and the clients agreed to have their monies invested in mutual funds over the course of a number of weeks rather than in one lump sum,” the regulator’s settlement agreement states. “However, the respondent did not obtain from the client instructions regarding the specific date for the trades prior to processing the trades and used his discretion.” 

No clients complained 

No material change occurred in the mutual fund unit prices between the date Banks had his initial discussions with clients and the dates that the trades were placed. When audited by the firm, no clients complained about lack of authorization.

As for his note taking, Banks failed to call or meet with three clients to verify email trading instructions, before executing 18 transactions. In instances where he had conversations with clients, the regulator notes that he failed to record notes regarding authorization.

Banks’ firm imposed close supervision on the representative for seven months, charging him $2,800 for the trouble. In addition, the regulator fined Banks $12,500 and assessed costs in the amount of $5,000.