(December 4 – 16:20 ET) – The Manitoba District Council of the Investment Dealers Association of Canada has imposed discipline penalties on Wellington West Capital Inc., Walter Silicz, who was at all material times the ultimate designated person for Wellington West, and Kevin Hooke, who was at all material times the chief compliance officer for Wellington West.

The respondents admitted that between October 1993 and March 1997 they failed to design, establish, oversee, and implement a compliance program that complied with IDA requirements.

Wellington West was fined $75,000, and ordered to pay $41,000.00 towards the IDA’s investigation costs.

Although the settlement between Silicz and the IDA recommended a fine of $25,000, the Manitoba District Council instead imposed a fine of $10,000 against Silicz. In addition, Silicz is required to rewrite and pass the Partners, Directors, and Officers exam administered by the Canadian Securities Institute.

Hooke was fined $25,000. In addition, he is permanently prohibited from acting as a compliance officer.

The investigation conducted by the IDA did not reveal any evidence that clients were harmed and there was no evidence of misconduct despite the compromise to the integrity of the self-regulatory system. Under the terms of the settlement, the IDA says that it is satisfied that Wellington West had taken adequate measures to remedy deficiencies in its sales compliance practice and that it was now in compliance the association’s supervisory policy.

Wellington West became a member of the IDA in September 1993. At that time Wellington West had only two full-time reps, one of whom was Silicz. As the Ultimate Designated Person, Silicz would be conducting daily and monthly reviews.

To ensure that there was an additional layer of supervision, particularly of Silicz, the IDA required the firm to hire a part time non-trading compliance officer as a condition of membership. Hooke provided a written undertaking to the IDA promising to act as the part time non-trading compliance officer. One of Hooke’s tasks was to supervise Silicz’s accounts. By January 1996 Wellington West employed five full time registered representatives.

Between October 1993 and March 1997, IDA staff conducted three compliance reviews at the firm. Following completion of the final review in March 1997, Wellington West was notified that an investigation into the adequacy of their supervision and supervisory controls was underway.

The respondents admitted that Wellington West procedures for daily supervision lacked sufficient formality and the lines of responsibility were not sufficiently clear. This led to internal confusion over who was responsible for daily and monthly supervision.

The respondents also admitted that between October 1993 and March 1997, Wellington West failed to provide clients with a written fee schedule, and failed to provide clients with Forms B and C.
-IE Staff