The Saskatchewan Securities Commission has reached a settlement agreement with Tge Height of Excellence Financial Planning Group Inc. to dispense with an enforcement action against the firm over the sale of limited partnerships.

Under the deal, the firm will pay an administrative penalty of $85,000. The firm agreed that it approved the securities of Barclay, Marina Shores and West Valley limited partnerships for sale by their salespersons when the securities were speculative and high risk and not suitable for some of the firm’s clients.

It also admitted that it failed to properly supervise the activities of its salespersons in Saskatchewan in the distribution of Barclay, Marina Shores and West Valley where its salespersons effected sales to clients who were not suitable.

Earlier, the SSC held a hearing against HEFPG salesman and branch manager Darcy Bergen over the sale of these limted partnerships. It ordered that Bergen not be allowed exemptions under the Securities Act for 10 years. It also imposed a trading ban, an administrative penalty of $50,000, and costs of $5,049.75.

In that hearing the commission stated that, “We also find it unacceptable, as a registrant selling an exempt product such as ‘Barclay’ and ‘Marina’, to have a customer enter into a sale by signing documents that are not clearly explained to them in regard to highly material matters. We accept the evidence that Bergen either did not tell his customers they were signing promissory notes making them liable for a potential investment of $150,000 or he explained it away in a fashion that was not correct, that the note was ‘not an issue’.”

“He clearly admits he had no understanding of ‘Barclay’ and ‘Mariner’. While not understanding these limited partnership offerings, while they were clearly different from mutual funds, he did have access to offering memorandums that clearly warned, on their face page, that they were speculative.”

“Bergen defended the suitability because he was involved, to some extent, in controlling the placing of the funds. We do not consider that a justifiable assumption regarding an investment where potential conflicts are undisclosed and investments are in real estate which is not conducive to classification as liquid and liquidity is a prime requirement for someone of that age for estate settlement purposes if for nothing else.”