A Canadian Investment Regulatory Organization (CIRO) hearing panel has accepted a settlement agreement with Stephen Patrick Laporte, after Laporte agreed he failed to record and maintain adequate evidence of client trade instructions. He is also being sanctioned for altering forms without obtaining client initials prior to using the forms to process transactions. During the course of the firm’s investigation into his conduct, two pre-signed account forms created for two different clients were also discovered.

The regulator fined the Ottawa-area Desjardins Financial Security Investments Inc. dealing representative $26,000 and ordered him to pay costs in the amount of $5,000.

The penalties were handed down for 14 trades processed in five different client accounts between February 2016 and June 2021. “The respondent states that he received instructions from the clients in relation to the trades but failed to record and maintain adequate evidence of client trade instructions in the letter of direction or elsewhere, including recording client instructions in respect of the timing of the trade, the amount of the trade or the security to be traded,” the settlement agreement states.

Altered forms 

In addition to executing trades without recording instructions, between April 2015 and February 2020 he was also found to have altered and used 44 account forms for 33 different clients. The altered forms included account opening forms, letters of direction, know your client update forms, various applications and one authorization to transfer form. The alterations included changes to client risk tolerances, investment knowledge, transfer instructions, investment objectives, net worth, fund codes and client information regarding the source of funds.

Registered with the firm since January 1998, Desjardins issued a warning letter and placed Laporte under strict supervision, which was ongoing as of December 2023. No clients reported any concerns to the firm during the course of its investigation.