Lucy Marie Pariak-Lukic, a registered representative in Stoney Creek, Ont. engaged in conduct unbecoming and acted contrary to the public interest by recommending off-book investments to clients, according to an Investment Industry Regulatory Organization of Canada (IIROC) panel.

The panel found that between 2006 and 2008, Lukic, at the time a registered representative with the Stoney Creek, Ont. branch of yourCFO Advisory Group Inc., recommended off-book investments to clients without the knowledge of her dealer firm and without taking appropriate steps to ensure the investments were exempt from prospectus requirements.

The panel’s decision on the merits document reveals that Lukic introduced clients to Lakepoint, a single private company that lent money to Trinity, a private company that invested in second mortgages. Lukic’s husband owned Lakepoint — a fact that Lukic disclosed to clients.

At no point was yourCFO informed of the Lakepoint transactions, according to IIROC, even though client investments in the company were included on their regular statements from Lukic, which were printed on yourCFO letterhead.

Furthermore, Lukic relied on second-hand information from her husband, who spoke to a lawyer recommended by Trinity, that the investment did not require a prospectus instead of looking into the exempt status of the investment herself. IIROC believes Lukic should have made more of an effort to learn if the investment did in fact qualify for exempt status.

Lakepoint raised $3 million from 18 investors to place with Trinity, according to IIROC. The investors consisted of Lukic, her husband, a relative and some of Lukic’s clients. IIROC notes that one client opened an account with yourCFO but never deposited any funds.

In 2010, Trinity defaulted on its obligations to Lakepoint and faced bankruptcy. IIROC believe it is unlikely that investors will recoup any of their financial losses in this matter.

IIROC has yet to impose a penalty on Lukic, who is currently a registered rep with the Stoney Creek
branch of Burgeonvest Bick Securities Ltd.