(April 12 – 02:40 ET) – The Pacific District Council of the Investment Dealers Association of Canada has imposed penalties on two British Columbia brokers, James Cumming and Gayle MacKay.

Cumming was a rep at CIBC Wood Gundy Securities Inc. As part of a settlement reached with the IDA, Cumming acknowledged that on June 21, 1994, Jan 5, 1996, and March 20, 1997, he paid three clients out of his personal funds for trading losses incurred by these clients. Cumming did this without the authorization of his employer.

Wood Gundy became aware of payments in June 1998, when Cumming claimed them as business expenses.

Cumming receives a fine of $5,000, and must re-write and pass the Conduct and Practices Handbook for Securities Industry Professionals exam. In addition, he must pay $1,000.00 toward the IDA’s investigation costs.

MacKay was a rep at Midland Walwyn Capital Inc. (now Merrill Lynch Canada Inc.) MacKay acknowledged that between Jan. 5, 1995, and March 31, 1997, she failed to use due diligence to ensure that recommendations for the RRSP account of a client were appropriate for the client and in keeping with his investment objectives.

On May 30, 1996, MacKay recommended the purchase of shares in Bre-X Minerals Ltd. for the client’s RRSP account. This account did not have speculative trading as an investment objective nor did Ms. MacKay advise the client of the speculative nature of this investment. A second purchase in Bre-X was effected in this account on Feb. 20, 1997. The client lost the entirety of his $10,572.52 investment in Bre-X.

MacKay receives a fine of $5,000, and must re-write and pass the Conduct and Practices Handbook for Securities Industry Professionals exam. In addition, she must pay $1,928.00 toward the IDA’s investigation costs.