A small investment dealer that is intheprocess of winding up its business is the latest firm to refuse a compensation recommendation from the Ombudsman for Banking Services and Investments (OBSI).
OBSI said Wednesday that Byron Capital Markets Ltd. declined to compensate a client who, it found, was sold unsuitable investments.
According to OBSI’s investigation report on the case, an advisor with the firm recommended two investments that were higher risk than his client was willing to take, and therefore unsuitable for his account. OBSI also found that the risks and features of the unsuitable investments were not properly disclosed.
Specifically, OBSI says that the advisor recommended “high-risk, complex leveraged structured products in his small business account that were unsuitable given his risk tolerance and investment objectives.”
The dispute resolution service concluded that Byron should be responsible for compensating the client for the losses he incurred as a result of the unsuitable recommendations, which amounted to just over $40,000, plus $1,000 in interest.
However, the firm declined to offer compensation. According to OBSI’s report, Byron said that the client was provided with prospectuses for the investments, which disclosed their salient features; that the investments were consistent with his overall investment objectives; and, that his losses were triggered by his decision to sell specific securities.
According to OBSI, Bryon recently ceased most of its operations and it has applied to resign from the Investment Industry Regulatory Organization of Canada (IIROC). IIROC announced its planned resignation on May 22.