A Canadian Investment Regulatory Organization (CIRO) hearing panel had accepted a settlement agreement, with sanctions, between the organization’s enforcement staff and registered representative, Robert Barber. In the settlement agreement Barber admits he failed to fulfill his gatekeeper responsibilities when he ignored red flags in his client’s accounts.
“Between December 2017 and August 2018, the investment accounts of one client for which the respondent had responsibility, generated a number of indicators or red flags which suggested that they may have engaged in activity that was suspicious,” the settlement agreement states.
“The red flags included the deposit of share certificates for four issuers with values ranging from $165,000 to $2,818,000; the sale of those securities in the days before and shortly after the share certificate deposits; and the immediate withdrawal of the majority of the proceeds of sale. For certain issuers, the trading was uneconomic,” they add, saying the activity was also out of line with both the client’s normal and historical account activity and the client’s know-your-client (KYC) information.
More, the activity was directed by the client’s spouse, who did not have formal trading authorization but who had been convicted of market manipulation in Germany, which was reported by Canadian news outlets. “Given the extent of AM’s involvement in the Northwest accounts, the respondent ought to have conducted due diligence on AM and disclosed AM’s involvement.”
Mackie Research Capital Corporation, the firm where Barber works in Vancouver, British Columbia, the settlement agreement continues, “was accordingly not aware of any possible concerns with the Northwest accounts in circumstances where an unauthorized individual who had been convicted of market manipulation, was involved with the accounts.”
In addition to a fine in the amount of $25,000, Barber agreed to disgorge his commissions—$27,776 in total—and pay costs in the amount of $5,000.
