The Canadian Investment Regulatory Organization (CIRO) has sanctioned Halifax, Nova Scotia based dealing representative, Sean Joseph Howes, fining Howes $20,000 and assessing investigation costs after Howes admitted to altering client account forms without getting clients to initial the changes to confirm their authorization.
All told, during a four-year period between January 2017 and May 2021, Howes admitted that he altered and used 35 account forms to process transactions for 20 different clients.
Discovered during a May 2021 file review, the altered forms included know your client (KYC) update forms, letters of direction, new account application forms, trade tickets, transfer authorization forms, systemic instruction forms and others. Altered information included risk tolerance profile information, investment objectives, instructions, net worth information, gross annual income amounts, fund codes, banking information and account numbers. When the affected clients were audited by the firm, none reported any concerns.
Placed under close supervision
Registered since January 2003, Howes was placed under close supervision for 12 months and was required to sign an undertaking confirming his understanding of his firm’s policies and procedures regarding alterations to client account forms.
“By entering into this settlement agreement, the respondent has saved the corporation the time, resources and expenses associated with conducting a contested hearing on the allegations,” CIRO states. Despite his cooperation, in addition to the $20,000 fine, Howes was also ordered to pay the regulator’s investigation costs in the amount of $2,500.
