The Investment Industry Regulatory Organization of Canada has found that a former registered representative at a Toronto branch of CIBC World Markets provided falsified account documents to clients and conducted discretionary trading without client authorization, among other breaches of IIROC rules.
Following disciplinary hearings held in May and September, an IIROC hearing panel found that Shaun Gerard McErlean engaged in misconduct.
McErlean became employed by CIBC in October 2002, and registered as an investment representative in 2004. Between January 2005 and January 2009, he was employed by CIBC Wood Gundy and, later, by CIBC World Markets as a registered representative.
The IIROC hearing panel found that from January 2008 to January 2009, he provided falsified account documents to two clients and misrepresented investment information to two clients about their accounts.
In one case, he purchased 100 shares of Quadra Mining for a client’s account, but a few weeks later, he provided his client with a portfolio evaluation which did not report the Quadra holding. In the same client’s account, McErlean failed to execute certain trades in according to the client’s instructions, but sent the client e-mails misrepresenting the fact that the trades had been completed.
In another case, he sent a client a statement showing that the balance of her account was $39,212, which was false – the investments in her account only had a value of approximately $6,200.
IIROC also found that from July 2005 to January 2009, McErlean made discretionary trades in the account of a client without first having her written authorization or having the account approved as discretionary by his firm.
In addition, the panel determined that between December 2008 and January 2009, McErlean personally compensated two of his clients for losses in their accounts without the knowledge or approval of his firm.
McErlean is no longer a registrant with an IIROC regulated firm. A separate hearing will be held to determine the penalty to be imposed on him.