OSC gets tough on IIROC advisors

OSC gets tough on IIROC advisors

OSC gets tough on IIROC advisors In a case that dates as far back as 2006, the OSC has taken an IIROC Hearing Panel’s 2014 decision to task, suggesting the OSC is more than prepared to bare its regulatory bite when it comes to IIROC advisors.
 
On Monday the OSC sent out an enforcement notice based on its decision from June that ordered Lucy Marie Pariak-Lukic to receive a two-year ban in addition to the fines previously assessed by the IIROC Hearing Panel on March 6, 2014.
 
The OSC found that the fines were far too lenient given the specific details involved in the case.
 
“The Panel erred in law and proceeded on an incorrect principle in determining that a suspension was not required in all of the circumstances,” wrote Commissioner Christopher Portner in his conclusion dated June 22, 2015. “In addition, the Panel's approach to determining the appropriate sanctions for Lukic's misconduct illustrates that the Panel's perception of the public interest is inconsistent with that of the Commission.”
 
Pariak-Lukic was a registered representative with YourCFO Advisory Group Inc. in 2006 when she began recommending and/or facilitating off-book investments for her clients in Lakepoint Mortgage Investment Fund 1, which made loans to Trinity North America Limited, who turned around and invested the funds in second mortgages in the Toronto area.
 
Between the advisor, her husband, and clients, the group invested $3 million in Lakepoint. IIROC staff had several problems with Pariak-Lukic’s actions including the failure to disclose to her firm that she was selling investments off-book, failing to let her clients know that investing in her husband’s company (Lakepoint) was a conflict of interest, and not confirming that a prospectus had been filed or was exempt from filing.
 
Interestingly, IIROC staff recommended Pariak-Lukic get a two-year suspension but the Hearing Panel didn’t agree.
 
“IIROC Staff requests that a two year suspension on Lukic's registration be imposed,” wrote Portner. “Having considered all of the circumstances of Lukic's conduct, I agree that it is appropriate.”
 
WP reached out to Ottawa advisor Bob Roby for his thoughts on the OSC adding to the IIROC Hearing Panel’s sanctions.
“In this case I’m in full agreement. Regardless of how the clients have done, I think that she [Pariak-Lukic] should be banned,” said Roby. “It’s a slap in the face to the IIROC advisor. The OSC is being kind with just a two-year hiatus. It’s these sort of advisors that make our industry look bad.”
 
4 Comments
  • paul P 2015-07-08 9:57:31 AM
    completly agree with bob roby's comment, the need to truly punish offenders will do more to clean up the industry than anything else, the rules are in place, but they need more teeth
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  • Barry Geen 2015-07-08 10:19:24 AM
    OSC talks tough when it comes to squashing a puny advisor for a victimless "crime". (excuse me she didn't tell her brokerage she was moonlighting, poor them). When it comes to taking on someone like Ernst and Young for their facilitation of corporate fraud, (Sino Forest, latest example) or the principles of Sino Forest, now spending their ill gotten gains, or indeed Conrad Black who arguably has made a career of looting companies, they don't have the nerve or the competence to act .
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  • Robert Roby 2015-07-08 5:13:51 PM
    Barry

    I understand your frustration but get a grip. This advisor sold unapproved investments, filtered them for personal gain to her husbands corp then flipped those assets and I am under the understanding that the 3 million dollars that she did is nowhere to be found.Puny I don't think so!
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