A former registered representative in British Columbia must pay $50,000 as part of a settlement agreement with the Investment Industry Regulatory Organization of Canada (IIROC).
Daniel Smith received the fine for engaging in personal financial dealings with clients between July 2003 and October 2009. During that time, he was a rep at the Parksville, B.C. branch of BMO Nesbitt Burns Inc. Nesbitt fired Smith in February 2010 for failing to disclose the personal financial dealings.
Smith and his family developed a personal relationship with an elderly couple after they became his clients around 1993 when Smith worked with Midland Walwyn. The husband and wife had no children of their own.
In 2003, the husband became terminally ill with cancer and the couple sold their waterfront property to Smith. In 2004, after her husband’s death, the client gifted $30,000 to each of the Smith children for their university education. That same year, the women updated her will making Smith and his family 75% beneficiaries of her estate. The gross value of the estate was approximately $1.2 million.
At no point did Smith disclose these dealings to Nesbitt Burns. The brokerage firm only became aware of the issue in 2008 after the wife had died and BMO Trust Company, the executor of the client’s will, informed Nesbitt Burns that Smith was a beneficiary.
In addition to the fine, Smith is suspended from registering with IIROC for four years and must pay $5,000 in costs.