The New Self-Regulatory Organization of Canada (New SRO) has fined Stephen Scott Smockum, a former approved person registered with Desjardins Financial Securities Investments Inc. and with GP Wealth Management Corporation for misleading his firms. He is also being sanctioned for borrowing close to $1-million from clients, for engaging outside activity when he registered a numbered company to start a marijuana business and for making false notes in client files when he redeemed their mutual funds for the purpose of borrowing from the clients in question.

Two clients Smockum borrowed from were vulnerable by virtue of their age. Another relied upon her investments for income. Multiple mutual fund redemptions for at least three clients were recorded as funds to be used for the purchase of property when the funds were in fact used to provide loans to the representative.

In its reasons for decision, the regulator confirms that Smockum has been permanently banned from conducting securities related business in any capacity with any New SRO member firm. It also confirmed that Smockum was fined $275,000 and ordered to pay costs of $10,000. In the decision, the New SRO gives Smockum until February 2025 to pay the fine.

Registered in the securities industry since April 2006, the former branch manager from Norwood, Ontario borrowed $919,315 from eight different clients, failing to repay more than $208,506. (The outstanding amount was paid by Desjardins when the matters came to light.) On at least two annual compliance attestations, Smockum stated that he had not engaged in any conflict of interest by borrowing funds from clients. “These statements were clearly false,” the reasons for decision states. Further investigation included contacting all clients served by Smockum, a line of inquiry which produced no further questions or concerns.

“The respondent took advantage of his professional relationship with his clients to his financial advantage and placed his clients’ money at risk,” the reasons document states. “The fact that the respondent was unable to repay a substantial portion of the monies borrowed reveals the potential detrimental implications of engaging in such activity.”