A registered representative based in Victoria has been fined $60,000 and ordered to pay costs of $45,000 by the Investment Industry Regulatory Organization of Canada for instructing staff to submit false documents to her company’s head office, among other violations.

On Tuesday, IIROC announced penalties against Carolann Steinhoff, a former rep and co-branch manager at Wellington West Capital Inc. in Victoria.

IIROC found that between 2004 and 2008, Steinhoff condoned the creation by her staff of false documents, and in two instances, she explicitly instructed them to do so and submit them to her firm’s head office as genuine. This included photocopying or cutting client signatures from older or unrelated forms and then pasting them onto new forms or letters of direction with different instructions; and whiting out instructions and dates but not the client signatures on older forms and inserting revised instructions and dates without having the client sign the revised documents. Steinhoff’s assistants faxed these forms to Wellington’s head office as properly executed documents, according to IIROC.

IIROC also found that Steinhoff attempted to mislead her firm’s compliance department by giving deceptive answers to its inquiries about her activities; and attempted to mislead IIROC investigators by giving deceptive answers to various inquiries, instigating a witness to give false evidence, and tendering as genuine a copy of a document that she had altered by inserting a date that did not appear in the original.

In its decision of sanctions, IIROC noted that there was no evidence that Steinhoff’s conduct was motivated by, or resulted in, any personal financial gain. Rather, the regulator said she appears to have instructed her staff to create the false documents “with a view to implementing expeditiously the wishes or instructions of clients in the face of and in response to what Mrs. Steinhoff and her assistants considered bothersome, inconvenient and unnecessary documentation requirements imposed by Wellington’s head office in Winnipeg.”

“None of her clients has complained of any of these matters,” IIROC said in its decision. “We accept that she was motivated by a desire to serve them well. That does not, however, justify her thumbing her nose at the laws and regulations that govern her in the conduct of her business.”

Under the penalty, Steinhoff has been suspended for one year, starting on October 15, 2010; and upon the expiry of the suspension, she will be subject to strict supervision for another year.

Steinhoff also faces a three-year prohibition from holding any director or senior officer position at a member firm, effective immediately, and will then be required to re-write and pass the CSI Partners, Directors and Senior Officers Course in order to hold such a position.

The fine of $60,000 must be paid by January 1, 2011; and costs of $45,000 must be paid by October 15, 2011 as a condition of her eligibility for reinstatement on that date.

Steinhoff is currently registered with Queensbury Securities Inc., an IIROC-regulated firm, in Victoria.

IE