IDA councils in N.S. and B.C. imposes sanctions

The discipline penalties
assessed against Mr. Oulton are a
fine of $10,000.00, and
disgorgement of $100, the
approximate commission income
earned on the discretionary
trades. In addition, Mr. Oulton
must pay $2,000.00 toward the
Association’s costs in the matter.
The District Council also
prohibited his future approval
unless he re-writes the exam based
on the Conduct and Practices
Handbook, and pays in full the
above fine, disgorgement and
costs. If, in the future, Mr.
Oulton is re-approved by the
Association for employment with a
Member, the District Council has
ordered that he must be subject
to strict supervision for a
period of six (6) months.

Meanwhile, the Pacific
District Council of the
Investment Dealers Association
of Canada has imposed discipline
penalties on Jerry Ivo Jaager, a
former registered representative
at the Penticton, B.C. branch
office of Midland Walwyn Capital
Inc.

In the spring and summer of
1994, Jaager became interested in
the progress of Dentonia Resources
Ltd. a junior, non-producing
diamond exploration and mining
company listed on the Vancouver
Stock Exchange which was awaiting
the results of its first
significant core sample. He
convinced three clients to purchase
shares in Dentonia by giving them
positive undertakings as to the
future value of the securities
without disclosing the risks
involved with such an investment.
The clients collectively lost
approximately $59,000 following
the announcement of poor assay
results in or about August, 1994.

In respect of two of these
clients, Jaager was aware that
their investment objectives had
changed from 100% speculative
when their accounts were opened
in December 1992 to 100% long-term
growth with low risk by the spring
of 1994, due to material changes
in their personal circumstances.
However, he failed to update
these clients’ new account
application forms to reflect these
changes. The changes to the
circumstances and investment
objectives of these clients
rendered Jaager’s recommendation
that they purchase shares of
Dentonia unsuitable for either
of them.

Also, on or about August 8,
1994, Jaager purchased 1,000
shares of Kettle River Resources
Ltd. at $11.375 for the account
of another client. This client’s
account with Midland Walwyn Capital
Inc. had not been constituted as
a discretionary account in
accordance with Association
Regulation 1300.4, and the
client never authorized the
purchase. The trade was
subsequently cancelled by Midland
Walwyn Capital Inc.

Finally, Jaager borrowed
$18,000 from yet another client,
and he failed to disclose this
loan arrangement to his Member
firm. He repaid the loan; he
has not made restitution to the
other clients. He is no longer
employed in the industry.

The discipline penalties
assessed against. Jaager are a
fine in the amount of $30,000, a
condition of any re-approval
by the Association in any
registered capacity that he
must re-write and pass the
examination based on the
Conduct and Practices Handbook
for Securities Industry
Professionals. He must submit
to being closely supervised for
a period of 12 months. In addition,
Jaager is
required to pay $6,000 toward the
Association’s costs of
investigation of this matter.

-IE Staff

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