By James Langton

(November 7 – 18:45) – The Ontario District Council of the Investment Dealers Association has slapped a former BMO Nesbitt Burns broker with a $25,000 fine, $144,521.50 in disgorgement penalties, and assorted other sanctions.

The IDA ordered the fines and disgorgement of commissions against former Nesbitt broker Thomas Ulkutekin for failing in his “know your client” obligations, churning and unauthorized trading.

The IDA found that in spring 1993 Ulkutekin opened eight accounts for six new clients. In the case of five of these clients, he overstated their income and net worth and incorrectly indicated their investment objectives on their new account application forms.

The IDA says between spring 1993 and late 1996, Ulkutekin “acted against the interests of five clients by trading excessively in their accounts for the purposes of generating commissions”. In two accounts, total commissions in one year exceeded invested capital and in one account the commissions as a percentage of average equity amounted to 122.90%. Total losses sustained in seven of the accounts ranged from approximately $5,900 in one account to $42,000 in another.

The IDA also found that from June 1995 to July 1996, Ulkutekin executed 17 trades in the accounts of two clients while they were living out of the country. In November 1996, he executed three more trades in a client’s account while the client was out of the country. These trades were completed on a discretionary basis, although there was no written authorization received from the clients nor were the accounts accepted in writing as discretionary accounts by Nesbitt.

On top of the fines and disgorgement, the IDA ordered that Ulkutekin must pay $10,000 toward the IDA’s investigation costs. Ulkutekin is suspended for three months, must re-write the Conduct and Practices Handbook exam before he can re-register.