IIROC Enforcement Proceedings – September 2014

SUITABILITY

(a) Commissions Compared to Losses Incurred For One Client

Simon Roy Jaques, Decision 14-0185

The Respondent, an investment advisor, was unresponsive to IIROC and did not participate in the hearing. He was fined $50,000 for his failure to cooperate.

He was also found to have failed to use due diligence to ensure that orders for one client were suitable.

Client was 56 years old, retired with $70,000 income, $30,000 in spousal income, $750,000 in liquid assets, $350,000 in fixed assets, 50% medium and 50% high risk objectives. Investment assets were required to produce income as she was unable to work due to illness.

The purchase and sale of Orko Silver Corp. was found to be unsuitable in part because the Respondent earned $675 in commissions while the client incurred a loss of $3,953. Further purchases of resource based securities in a margin account which generated losses to the Client but profit to the Respondent were also found unsuitable.