Dundee Securities Corp. must pay the Investment Industry Regulatory Organization of Canada (IIROC) $110,000 in fines for failing to properly supervise the accounts of two retired couples.

According to IIROC documents, between 2006 and 2009, Dundee failed to properly supervise two accounts managed by Kenneth Gareau, a registered representative and branch manager in Regina. Gareau’s clients were two couples all four of whom were elderly, retired farmers.

The clients all held inappropriate investments given their age, investment knowledge and risk tolerance. For example, the clients were dependent on their investments to supplement their income and were primarily concerned with preservation of capital, according to IIROC, and had a low level of risk tolerance. However, the clients were invested largely in equities and in one case held a margin account.

Dundee’s head office did not question Gareau’s trading activity in relation to the accounts, the suitability of a margin account and other investments for the clients, despite their age, according to IIROC. As such, the self-regulatory organization found that Dundee failed to properly supervise the accounts.

During the financial crisis, the client couples lost 60.2% and 36% of their respective investments. IIROC notes that both clients received compensation for their losses from Dundee and in one case from Gareau.

In addition to the fine Dundee was also ordered to pay $10,000 in costs.