Investors Group Financial Services Inc. registered representative, Norman Shogilev is being fined $25,000 and assessed costs in the amount of $5,000 after a Canadian Investment Regulatory Organization (CIRO) hearing panel accepted a settlement agreement between Shogilev and CIRO staff.
Specifically, Shogilev is being sanctioned for failing to update a client’s residential address when he knew or ought to have known that the client was no longer a resident of Canada. He is being sanctioned for processing transactions in that client’s account while the client was living in Singapore and the United States. Later, when the client complained about the Canada Revenue Agency (CRA) penalties related to the transactions, Shogilev attempted to offer compensation to the client directly to settle the complaint without Investors Group’s knowledge or approval. The representative gave the client a check for $10,000, saying it represented the majority of advisory fees the client had paid over the years. “The client declined to deposit the check,” the reasons for decision states.
Discretionary trading
Finally, Shogilev is being sanctioned for discretionary trading in that client’s accounts, as well, after being instructed to redeem funds, which he did, but without obtaining instructions from the client about which mutual funds to redeem.
After learning about the complaint, Investors Group paid the client to compensate them for their incurred CRA penalties. The firm also reimbursed the client $544 for deferred sales charges incurred when the client redeemed $25,000 to pay the CRA penalty, and $160,000 for a downpayment on a property they intended to purchase.
The panel’s reasons for decision states that a hearing panel can only decide whether to accept or reject proposed settlements. “It is well established that a settlement hearing panel is not tasked with deciding whether it would have imposed the same sanctions,” they write, adding that it is also not the panel’s place to modify or alter the sanctions.
Remedial ethics training
In addition to the $25,000 fine and costs, Shogilev was also ordered to complete remedial ethics training. The settlement agreement stopped short of suspending Shogilev for any period of time. In the reasons for decision, the fact that the misconduct arose from transactions related to just one client was discussed, Shogilev has acknowledged that his conduct constitutes a serious breach, and his long career – the representative was first registered in July 1995 – were all noted as factors that the panel took into consideration when making its decision.