The latest Canadian Investment Regulatory Organization (CIRO) decision about the use of pre-signed and improperly altered forms has resulted in a fine of $22,500 for George Mazim Lukiwski after Lukiwski admitted that he, or his unlicensed assistant, used altered account forms for transactions without getting clients to properly execute the alterations. He is also being sanctioned for possessing and using 25 pre-signed account forms for 19 different clients.
Strict supervision
The transgressions occurred between March 2017 and November 2020. Discovered during a review conducted in December 2020, the firm placed Lukiwski on strict supervision and sent audit letters to affected clients. Lukiwski paid the firm $500 for the close supervision, along with an undisclosed amount related to the client audit costs.
The altered account forms – 29 altered forms were found for 25 different clients – included order instruction and know-your-client (KYC) forms, systemic instruction and purchase forms, new client application forms and transfer authorization forms. The alterations included alterations to risk tolerances, net worth, objectives, monetary amounts, accounts numbers, dates, fund codes and more.
Creates risk for investors
“Such conduct can obscure the audit trail, lead to unauthorized or discretionary trading, and potentially lead to (or conceal) fraud. The use of pre-signed or altered forms creates risk for investors and is harmful to the reputation of the investment industry,” the decision and reasons on penalty states. “None of this should have been a surprise to the respondent, who has been a registrant since 2001.”
In determining the fine and costs, the hearing panel noted that enforcement figures presented in the case show form violations shrinking as a percentage of total enforcement files opened.
The Saskatoon-area dealing representative was also ordered to pay costs in the amount of $5,000.
