An ill-advised move by an advisor reminds regulators that no amount of supervisory oversight can regulate ‘stupid’
A former registered representative with the Vancouver office of BMO Investorline has reached a settlement agreement with IIROC’s enforcement staff for actions taken by the big bank advisor between March and June 2013.
The settlement, which was accepted by an IIROC hearing panel on July 28, includes the usual fines and suspensions commonplace with enforcement sanctions in this country.
However, the details of the case suggest even the most attentive supervision by dealers can still result in transgressions carried out by rogue advisors.
In this particular situation, the advisor was handling the opening of a BMO Investorline account for a very important client of the bank to ensure the transfer in of a particular security for the sole purpose of selling those shares.
“The Respondent represents that a BMO Manager advised the Respondent that MH was an
ultra high net worth individual who just completed a $250 million dollar financing with BMO
Capital Markets and was a very important client of BMO,” stated the IIROC settlement.
In an effort to make things happen on an account transfer that was taking longer than it should have, it appears that the advisor cut a few corners including signing a transfer document on the client’s behalf because they were overseas and couldn’t be reached and then falsifying a holdings report to indicate that the shares had been transferred when in fact they had not.
In the end, the advisor received a $30,000 fine, a nine-month suspension from IIROC, 12 months close supervision once re-registered with IIROC and the requirement that they re-take the Conduct and Practices Handbook Course prior to re-registration.
The advisor didn’t benefit financially from the misconduct agreed upon, which begs the question why the dealer isn’t also responsible for these actions given the pressure the BMO manager is said to applied in this instance.
The settlement, which was accepted by an IIROC hearing panel on July 28, includes the usual fines and suspensions commonplace with enforcement sanctions in this country.
However, the details of the case suggest even the most attentive supervision by dealers can still result in transgressions carried out by rogue advisors.
In this particular situation, the advisor was handling the opening of a BMO Investorline account for a very important client of the bank to ensure the transfer in of a particular security for the sole purpose of selling those shares.
“The Respondent represents that a BMO Manager advised the Respondent that MH was an
ultra high net worth individual who just completed a $250 million dollar financing with BMO
Capital Markets and was a very important client of BMO,” stated the IIROC settlement.
In an effort to make things happen on an account transfer that was taking longer than it should have, it appears that the advisor cut a few corners including signing a transfer document on the client’s behalf because they were overseas and couldn’t be reached and then falsifying a holdings report to indicate that the shares had been transferred when in fact they had not.
In the end, the advisor received a $30,000 fine, a nine-month suspension from IIROC, 12 months close supervision once re-registered with IIROC and the requirement that they re-take the Conduct and Practices Handbook Course prior to re-registration.
The advisor didn’t benefit financially from the misconduct agreed upon, which begs the question why the dealer isn’t also responsible for these actions given the pressure the BMO manager is said to applied in this instance.
