A former Toronto investment advisor must pay a fine of $50,000 to the Toronto-based Investment Industry Regulatory Organization of Canada (IIROC) for executing unauthorized trades.

In 2010, Peter Smith, who was employed by Canaccord Genuity Corp. at the time, started working with a client of a former Canaccord advisor. The client was a Canadian citizen with a Toronto residence, but spent large stretches of time in Florida and on a boat.

IIROC notes that immediately prior to the client’s hand over from the previous advisor to Smith, the risk tolerance on the client’s New Account Application Form (NAAF) went from 80% low-medium risk and 20% medium risk to 100% high risk.

The client did sign and return the updated forms to Canaccord, but IIROC says the client’s risk tolerance remained the same and Smith was aware that the client was interested in lower risk investments.

Between 2010 and 2012, the client and Smith occasionally spoke via telephone regarding the selling or purchasing of investments, according to IIROC, and these conversations were often quite brief. However, upon returning to Toronto after a long absence, the client found a number of Canaccord account statements listing over 50 trades made without any discussion or authorization.

As well, IIROC’s investigation into the matter found that some of those unauthorized trades were unsuitable for the client as they were speculative or high-risk investments, which, according to IIROC, Smith knew the client did not want despite the NAAF.

In another case, Smith made an unauthorized transaction in 2012 on behalf of a client whom he had worked with for over 10 years. While Smith made a number of calls to the client at the time of transaction, according to IIROC, the former advisor never actually spoke with the client.

In addition to the fine, Smith is suspended from approval with IIROC for two years, commencing April 12, 2012 and is required to complete the Conduct and Practices Handbook course by June 2014. Upon re-approval Smith must be closely supervised for one year. Smith also agreed to pay $3,000 in costs. Smith is not currently registered with an IIROC-regulated firm.