A hearing panel of the Investment Industry Regulatory Organization of Canada (IIROC) has permanently banned a former advisor in British Columbia and fined him $125,000, IIROC announced on Tuesday.
Following a hearing on May 10, the panel sanctioned Kenneth Edward Smith, a former Nanaimo, B.C.-based with Queensbury Securities Inc., after the panel found that Smith violated a variety of IIROC rules.
In an earlier decision on liability dated April 6, the hearing panel found Smith:
- engaged in personal financial dealings with a client;
- engaged in an outside business activity and off-book investing for a client, without the approval of his dealer;
- took money from a former client, allegedly to invest on her behalf, without dealer approval; and,
- refused to co-operate with IIROC staff during their investigation.
Specifically, the panel found that Smith opened an automotive chrome finishing business in 2014. In 2016, he obtained a $7,500 loan from a client to help finance the business, without obtaining approval from his firm.
Smith also opened an execution-only account for a client at another investment dealer in order to trade futures, which he wasn’t licensed to trade — ultimately losing most of the client’s money.
In 2015, Smith took $10,000 from a client, “purportedly invest on her behalf.” He provided the client with account statements indicating that her investment was increasing in value, but it turned out she did not have an account at the firm, the panel found.
Smith did not participate in the hearing, but did file a reply to the allegations. which, according to the panel, essentially admits all of the allegations against him, except for some minor details.