The Toronto-based Investment Industry Regulatory Organization of Canada (IIROC) has found that Halifax-based registered representative John Edward Brodie made unsuitable investment recommendations, made unauthorized discretionary trades and personally compensated clients for account losses.
IIROC documents state that between 2005 and 2009, Brodie, who was employed by Canaccord Capital Inc. (now Canaccord Genuity Corp.), headquartered in Vancouver, made unsuitable investment recommendations to two clients (a husband and wife). The recommendations included opening a margin account for the clients and investing heavily in mining and oil and gas stocks. Both of these actions did not meet the criteria set out in the clients’ Know-Your-Client form.
In addition to the margin account, the clients also opened a registered retirement savings plan (RRSP), a locked-in retirement savings plan and a spousal RRSP with Canaccord.
The hearing panel also found that Brodie made discretionary trades between 2005 and 2009 in the clients’ accounts. While Brodie argued that he made discretionary trades “less than five per cent” of the time, the IIROC hearing panel found that even if it only happened occasionally it was still inappropriate for Brodie to execute trades without the client’s consent as it was not a discretionary account.
Finally, between May 2008 and June 2009, Brodie deposited $44,000 of his own money into the personal account of the husband and wife because he “felt badly and did not want to see [their] margin account closed,” according to IIROC documents. Brodie also deposited another $2,200 over the same time period into the clients’ margin account.
Brodie is currently a registered rep in a Dartmouth, N.S., branch of Global Maxfin Capital Inc.
IIROC has yet to set a penalty.