The Investment Industry Regulatory Organization of Canada (IIROC) published its reasons for finding Douglas John Eley liable after an IIROC hearing panel found that Eley inappropriately altered documents after they were signed, and knowingly represented that clients had signed documents when that was not the case.
Eley, a registered representative and portfolio manager with Oakville, Ontario-based Echelon Wealth Partners Inc., contends that his conduct does not constitute a contravention of IIROC’s dealer rules.
In its statement of allegations, IIROC alleges that Eley altered documents after they had been signed by clients, and that he retained pre-signed mutual fund trade switch tickets which were or could have been used to effect trades in client accounts. Eley is also accused of changing dates on which clients purportedly signed the account documentation, before submitting the altered documents to his firm.
In some cases, IIROC alleges that some of the switch tickets appear to have come from the company where Eley had previously worked, with new Echelon letterhead and updated instructions superimposed on the amended switch tickets. Eley contends that the switch tickets were never used or intended to be used to execute a trade, further pointing out that such tickets were not required by his employer, by the carrying broker of by IIROC’s rules. Further, Eley says there is no evidence that he made the alterations or removed information from client files, and that any additions made to client files were always made with authorization from the clients.
“Despite the respondent’s denials, there is compelling circumstantial evidence indicating that it would have been difficult for Mr. Eley not to have been aware of the changes,” IIROC writes in its reasons for decision, dated January 28. “The alterations on documents presented to the panel were clearly apparent to the three panelists who examined them and compare them at the hearing. In some cases, multiple version of the same document, with identical signatures, had been used. There is no evidence to support Mr. Eley’s suggestion that temporary assistants could have been capable of making the inappropriate alterations without direction.”
IIROC goes on to explain in its reasons for decision that such alterations make it impossible to detect improper activities by looking at the file’s contents. “The regulatory process is impaired because the information on record in the files is untrustworthy,” they write. “The respondent insists that no harm came about as a result of his mistakes. This does not excuse the conduct. This is not a situation where ‘no foul, no harm’ is an inappropriate excuse. As a financial services practitioner for fifteen years, the respondent could not have been unaware of the risks posed by this conduct.”
A separate hearing will be held in the future to determine which penalties and costs will be imposed.
