The British Columbia Securities Commission has reached a settlement with a mutual funds salesperson who admitted to breaching know your client and suitability rules when he recommended leveraged investments to clients.
Martin Hall, a B.C. resident, is barred from trading securities other than mutual funds for three years except in limited circumstances. As well, Hall’s registration is subject to conditions for at least 12 months, including: daily strict supervision by his employer of his client and personal trading as well as restrictions on his ability to deal with clients who use leveraged funds to purchase mutual funds.
Hall was a registered salesperson at Foresight Capital Corp. from Jan. 7, 1999 to July 3, 2002. During his employment at Foresight, Hall recommended to two clients that they purchase mutual funds using money borrowed against the equity in their homes. The clients each had some or all of the following characteristics:
- Low to average net worth;
- Little or no investment experience and sophistication;
- Limited income, and
- Low tolerance for investment risk.
Hall also breached rules when he signed a client’s name on account and bank transfer documents.
With this settlement, Hall is no longer a respondent in the hearing currently underway at the BCSC.