The Investment Industry Regulatory Organization of Canada has fined Quebec-based registered rep Stéphane Rail $130,000 after he was found guilty of several counts, including engaging in outside business activities without the consent and knowledge of his firm.

In a penalty decision in August, an IIROC hearing panel imposed the fines against Rail after he was found guilty of five separate counts.

IIROC launched an investigation into Rail’s conduct in June 2005. The misconduct occurred while Rail was employed as a registered representative at the Ste-Foy, Quebec branch of TD Securities Inc. He had been a registered rep since 1987.

IIROC found that in 2000, while employed as a registered rep, Rail introduced one of his clients to another, with the aim of facilitating the obtaining of a loan for one client, knowing that his firm had already determined that this loan was too risky and that such behaviour was not consistent with his responsibilities as a registered representative. Rail was fined $35,000 for the count.

“The Respondent already had several years of experience in the securities industry and he showed gross negligence in failing to seek the prior authorization of his employer,” the hearing panel said in its decision.

He was also found guilty of engaging in conduct detrimental to the public interest by illegally taking advantage of prospectus exemption rules, for which he was fined another $35,000.

Rail was also fined $40,000 for failing to use due diligence in ensuring that a cheque was properly invested. IIROC also found that on two occasions, Rail deposited funds in a personal capacity in the account of a client. He was fined $10,000 for each count.

In addition to the fines, IIROC also ordered that Rail successfully complete the examination based on the Conduct and Practices Handbook Course within three months, and until then, he must remain under continued close supervision by his employer.

Rail currently works as a branch manager with Canaccord Capital Inc. in Ste-Foy, Quebec. The hearing panel noted that suspending Rail’s approval as a registered rep would not be appropriate for several reasons, including the fact that he has been employed by Canaccord, an IIROC-registered firm in good standing, since 2001.