A hearing panel of the Investment Industry Regulatory Organization of Canada has permanently banned a former broker with Union Securities Ltd. from registration, and fined him $200,000 for a series of related violations which include falsifying documents, forgery and unauthorized trading in client accounts.

The penalty includes an order for Ian Douglas Sauder to pay costs of $25,000. The permanent ban involves registration “in any capacity in situations over which IIROC has jurisdiction.”

The penalty decision follows a disciplinary hearing held on May 3, in Toronto where the hearing panel found that Sauder:

– produced falsified monthly client account statements that
misrepresented holdings and activity;

– forged clients’ signatures on account documents and instructions without client knowledge or consent;

– conducted eight unauthorized transactions in client accounts;

– concealed from his employer the fact a client was his spouse and misrepresented that relationship to his employer in a document;

– concealed that he was a beneficial owner of that account then controlled and conducted transactions in it; and

– refused and/or failed to attend and give information in an IIROC investigation.

Most of the violations occurred between 2005 and 2008 and are counts where Sauder engaged in conduct unbecoming and/or detrimental to the public interest, as well as know your client provisions. Sauder’s failure to co-operate also violated of IIROC rules.

IIROC began its investigation into Sauder’s conduct on April 15, 2009 when he was a registered representative with the Toronto branch of Union Securities Ltd. Sauder has not been a registrant with an IIROC-regulated firm since January 2009.

Sauder’s conduct “caused harm and a great deal of anxiety” to clients and “compromised the reputation and integrity of Union Securities,” the panel noted in its decision and reasons, which were issued on May 14, 2010.

“And most importantly, (his conduct) offended the foundation of trust on which the securities industry relies. (The scheme) took place over an extended period of time; it was manipulative, fraudulent and deceptive.”

IE