A Scotia Securities Inc. dealing representative who erred after being in the business less than a year, is being sanctioned by the New Self-Regulatory Organization of Canada (New SRO) after a Mutual Fund Dealers Association of Canada (now the New SRO) hearing panel accepted a settlement agreement with MD Sabab Alam.
According to the regulator’s reasons for decision, after being registered in Alberta as a dealing representative for less than a year in 2019 and 2020, Alam made a mutual fund purchase in a client account without obtaining instructions authorizing the purchase.
The Calgary area representative received a telephone call from one client he served, who told Alam that his spouse wished to transfer her own Registered Retirement Savings Plan (RRSP) to Scotia Securities, as well. The transfer took place in February 2020 at which time neither client provided investment instructions. Alam also did not make any investment recommendations at the time but, within days, processed the purchase of a portfolio mutual fund in the amount of $73,806.07.
“The respondent states he believed Client SK would want to invest in this fund because it was similar to the investments she had held at another financial institution,” the reasons for decision states.
After the clients complained about the purchase, moving the holdings to another mutual fund resulting in a loss of approximately $14,631, it was discovered that Alam had also created an investment direction form that stated his client instructed him to transfer the funds over the phone. “The respondent admitted both to the lack of authorization for the purchase and to recording of the false note.”
The reasons for decision further states that Alam has paid a fine in the amount of $9,000 and costs totalling $5,000.
