‘Creative’ advisor faces 10-year ban

‘Creative’ advisor faces 10-year ban

‘Creative’ advisor faces 10-year ban The Smith Manoeuvre is complicated enough but a so-called “Smith-Snyder Manoeuvre” has landed one MFDA advisor in hot water for failing to explain how much leveraging is required. 

The case before the MFDA Hearing Panel in PEI dealt with a situation that’s a whole lot more complicated, hence why Lloyd A. Snyder, a registered advisor for more than 24 years before being investigated, has agreed to a 10-year ban, a $50,000 fine and $50,000 in costs.

If he doesn’t pay the $100,000 in fines and costs, the ban becomes permanent.

What exactly was Snyder’s faux pas?

While registered as a mutual fund salesperson with Investia Financial Services Inc. he is alleged to have committed two acts contrary to MFDA rules. In simple terms he failed to fully explain the risks, benefits, costs and all other pertinent details about the Smith-Snyder Manoeuvre — Snyder’s own personalized leveraged investment strategy — to 15 clients. At the same time he failed to consider the KYC factors related to the leveraged investment strategy including the 15 clients’ ability to absorb losses, etc.

According to Hearing Panel’s Reasons for Decision, Snyder’s clients borrowed almost $1.4 million in investment loans from AGF Trust and B2B Trust, both owned by Laurentian Bank, to invest in return of capital mutual funds offered by Stone & Co. and IA Clarington Investments.

Snyder’s plan for those that don’t remember is a twist on the darling of the investment scene a decade ago – the Smith Manoeuvre. It’s a process that restructures non-tax-deductible mortgage debt into tax deductible investment debt over a number of years. It’s not a plan for those who have poor attention spans or serious commitment issues.


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1 Comments
  • David McDonald 2015-03-19 3:02:15 PM
    Why? Because he could.
    More to the point: Where was his compliance officer? Was Snyder a Branch Manager? Why didn't someone at Investia smell a rat?
    I am concerned because my dealer is Investia Financial Services Inc.
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