The New Self-Regulatory Organization of Canada (New SRO) announced that the regulator’s investment dealer division, formerly the Investment Industry Regulatory Organization of Canada (IIROC), has levied two fines, ordered the payment of substantial costs and has banned former investment advisor, Paul Maurice from registration for 10 months.
The former CIBC Wood Gundy advisor, registered with the firm since 2005, was found to have engaged in discretionary trading in the joint account of two clients. The hearing panel also found that Maurice made misrepresentations to enforcement staff during the course of its investigation – misrepresentation which ultimately led to the regulator incurring costs of more than $109,634.
The Moncton, New Brunswick registered representative was investigated in response to a complaint filed by two clients, a 77-year-old dairy farmer and his 76-year-old wife, who discovered, based on conversations with another advisor at the firm, that Maurice’s actions were out of line when he made trades without the couple’s permission or approval. Maurice testified during the investigation that he had a hostile relationship with that advisor, dating back to the 1990s.
The investigation looked at nine trades in particular, which occurred in an account that had not been approved or accepted as a discretionary account. Although Maurice provided notes, none detailed the times that the calls were made to secure the client’s approval.
Not only did Maurice claim to speak to the client while the client’s cell phone was in fact in an airport lost and found, Maurice reportedly told enforcement staff that phone records would confirm that he had spoken with the client on the dates that the trades in question were made. The phone records ultimately showed only five phone calls to the client. None of the fie calls took place on the dates the trades were made.
“Enforcement council argued that the respondent’s conduct in misleading enforcement staff in this matter was so serious it should attract, if not a permanent ban, at least a lengthy suspension together with a significant fine,” the penalty decision states. “The respondent’s misrepresentations resulted in the disciplinary process being drawn out, requiring IIROC staff to spend significant time and resources continuing its investigation.”
In its decision the New SRO ultimately levied $60,000 in fines - $10,000 for the trading and $50,000 for misleading staff. It also suspended Maurice for 10 months and required the former representative to pay costs in the amount of $25,000. If he returns to the industry – Maurice’s employment was terminated following the publication of IIROC’s liability decision – he must rewrite the Conduct and Practices Handbook exam prior to being re-registered with the regulator.
