Quebec City-based registered representative Daniel Bergeron has been fined $40,000 by the Investment Industry Regulatory Organization of Canada (IIROC) for failing to use proper due diligence and orchestrating a private off-book investment for clients.
According to IIROC documents, between 2002 and 2003, seven of Bergeron’s clients paid roughly $181,500 for shares in a mining company called Ressources Dasserat, which they were told was about to go public. IIROC states that from 2002 to 2009, Bergeron, who was an advisor with CIBC Wood Gundy at the time, did not conduct proper due diligence before investing clients through a private placement in the mining company.
Furthermore, IIROC documents indicate that despite the fact that clients never did receive any share certificates following the placement Bergeron did not adequately follow-up with the company. In 2007, Bergeron learned that Ressources Dasserat had failed to go public yet still did not inform his clients. The seven clients have received 50% of their initial investment from CIBC Wood Gundy.
The private placement made on the clients’ behalf was not sanctioned by Wood Gundy and was done with out the knowledge of the investment firm, according to IIROC. As such, the transaction constituted a private-off the book investment and was therefore an outside business activity in violation of IIROC regulations.
Bergeron left CIBC in 2009 and started working for Desjardins Securities Inc. in October of that year.
In addition to the fine, Bergeron is suspended for 60 days, must be closely supervised for six months after the suspension, successfully complete the Conduct and Practices Handbook course within one year and pay an additional $5,000 in costs.