IIROC case highlights power of the banks

IIROC case highlights power of the banks

IIROC case highlights power of the banks Recently a BMO Investorline registered rep agreed to a big fine and suspension by IIROC for forging the signature of a client that was needed to initiate a client’s transfer of shares into a new account.

While some advisors felt the punishment fit the crime, others wondered where the bank was in this entire situation.

“As is the case in most disciplinary actions, the individual advisor is most often the party who pays the highest price as they are the most vulnerable to the regulatory bodies,” commented B.W. Leitch. “These regulatory bodies do not seem to have the power or the willingness to confront the corporations who direct and control the advisors.”

Investor advocate Ken Kivenko who sits on the OSC’s Investor Advisory Panel spoke to this problem in February suggesting that management, not advisors, are the ones responsible for the systemic issues that continue to plague the industry.

“Being an advisor these days, if you try to do the right thing it’s very difficult. I hate to blame them because they’re put into a framework… You keep throwing these commission grids at them [advisors], you give them big awards…,” Kivenko told WP. “There are regulatory issues, dealer issues, ethical issues, but it’s going to show up with the advisor getting the blame.”

IIROC wouldn’t comment on whether BMO Investorline faced a separate disciplinary hearing but the facts of the case suggest one might be warranted in this example, especially when you consider that the branch manager involved could possibly have been the compliance manager as well.  

“The dealership will not be penalized and the bank will do anything to protect itself,” Manulife Advisor Monica Weissmann said reflecting on the case. “They [IIROC] have to have somebody to hang the guilt on and the broker is always the link of least resistance.”

Is IIROC afraid of the banks? Weissmann suggests this is entirely possible.

“[BMO Investorline] is just a sub-division of the bank. To take on them is to take on the bank,” Weissmann said. “How many times did IIROC take on any bank and eventually succeed?”
 
 
3 Comments
  • Stan Buell 2015-08-27 10:38:07 AM
    How true it is. B.W. Leitch says “These regulatory bodies do not seem to have the power or the willingness to confront the corporations who direct and control the advisors.”
    We have repeatedly said "the regulators are unwilling or unable" to take on the industry but grab headlines by "disciplining" representatives with big fines never collected.
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  • Are you kidding me? 2015-08-30 12:12:03 AM
    Who do you think pays for the existence of IIROC? Right, the banks, that's who. IIROC will continue to hang the advisor and do nothing to the banks. I can personally site 4 examples of this behaviour in the last 3 years.
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  • Ken MacCoy, CHS 2015-09-01 11:25:25 AM
    Stan: You hit the nail on the head.

    Both IIROC & the MFDA are an absolute joke when it comes to both discipline and collecting fines, but it's not funny!

    The reality: It's offensive to honest, ethical, professional advisors who work hard for and place their clients first.

    Just another reason why I'm an independent life insurance broker; this way I don't have to deal with either the MFDA or IIROC.
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