A hearing panel of the Investment Dealers Association of Canada (IDA) has found Stéphane Rail guilty of engaging in outside business activities without the consent and without the knowledge of his firm.

The panel’s findings followed a disciplinary hearing held on Jan. 15, 16 and 18 and March 4, 5 and 6, 2008, in Montreal.

The IDA had formally launched an investigation into Rail’s conduct June 22, 2005. The misconduct occurred while Rail was employed as a registered representative at the Ste-Foy, Quebec branch of TD Securities Inc.

The panel found that in 2000, while employed as a registered representative, Rail introduced one of his clients, HC, to another of his clients, LV, with the aim of facilitating the obtaining of a loan for LV, knowing that his firm had already determined that this loan was too risky and that such behaviour was not consistent with his responsibilities as a registered representative.

The hearing panel also found Rail guilty on two other counts:

> in 2000, Rail made inappropriate use of personal and confidential information regarding HC and LV, by introducing them to one another in order to facilitate a financing project to benefit LV;

> on Sept. 18, 2000, Rail failed to use due diligence to make sure that the cheque made by P. Inc., dated Sept. 14, 2000, in the amount of $333,000 and payable to COC, was properly invested in the account belonging to COC;

When the hearing resumed on March 4, 2008, Rail entered a guilty plea on three additional counts:

> In June and July 2000, Rail failed to use due diligence and engaged in conduct unbecoming and detrimental to the public interest, by creating an investors group, to which he belonged, for the purpose of investing over $150,000, when he knew or should have known, as a registered representative, that this stratagem constituted a means of illegally taking advantage of the provisions concerning the prospectus exemption stipulated in section 51 of the Québec Securities Act;

> On June 22, 2000, Rail engaged deposited in a personal capacity an amount of $48,112 in the account of his client RS, for the purpose of making a private investment;

> On July 18, 2000, Rail deposited in a personal capacity an amount of $35,000 in the account of his client RS.

Other charges in the notice of hearing were dismissed.

Since 2002, Rail has worked as a branch manager with Canaccord Capital Inc. in Ste-Foy.

The date of a penalty hearing has yet to be determined.