(November 21 – 10:55 ET) – The Alberta District Council of the Investment Dealers Association of Canada has imposed a $17,000 fine on Myron Roberts, a former rep with RBC Dominion Securities Inc.

As part of a settlement, Roberts admitted that he failed to use due diligence to ensure that recommendations made for three clients’ accounts were appropriate and in keeping with each client’s investment objectives.

Roberts also admitted that he failed to obtain approval from his branch manager to ensure that marketing correspondence issued to clients was in compliance with regulations.

Roberts was fined $15,000 for inappropriate trading, $2,000 for failing to obtain branch manger approval. In addition he must also pay the association’s costs of $3,875.

As a condition of his re-approval, Roberts must rewrite and pass the Conduct and Practices Handbook for Security Industry Professionals exam within six months following the settlement .He must also submit to strict supervision for a period of one year following the date of his re-employment in the industry. Roberts is no longer employed in the industry.

According to the IDA, in each of three client accounts, a New Account Application Form was completed. None of the accounts had a provision for speculative securities. In April 1997, Roberts purchased CIBC S&P put warrants (not as a hedge against other securities in the accounts) for each account. This IDA says this was a speculative investment.

In each case, Roberts, without the knowledge or consent of the account holder, updated the New Account Application Forms to include provision for speculative securities. In May 1997, on behalf of two of the account holders, Roberts made further purchases of products that were high risk and of speculative quality.

As a result of all transactions, the first two account holders, a husband and wife, suffered an unrealized loss of $37,025.52. The third account holder suffered a loss of $34,606.18. No restitution was made to any client either by Roberts or by RBC Dominion Securities Inc.
-IE Staff