Investment Advisor: Admissions Regarding Unsuitable Investments

Scott Bateman, Decision 14-0147

An investment advisor reached a settlement agreement with IIROC whereby he agreed to a fine of $20,000, $2,000 in costs and a rewrite of the CPH.

The settlement concerned the account of one individual who had been a client since 2002 and had followed the investment advisor from another dealer. The relevant time period is nonetheless defined as a thirteen month period beginning in March, 2008 and ending June, 2009 and therefore including the market crash.

It was admitted that as at March 31, 2008, the client's account was 98% high risk due to various purchases of Horizons Beta S&P Gold Bull (HGU"), Active Control Tech. Inc. and Appleton Exploration Inc. As at that time, the new client application form provided for 50% high risk which was changed to 100% high risk in July, 2011 (presumably outside the relevant time period). It was also admitted that recommendations to hold HGU in particular after it had dropped significantly in value