(November 8 – 12:55 ET) – The Ontario District Council of the Investment Dealers Association of Canada has imposed a $7,000 fine on Jeffrey Turcotte, a former rep with Midland Walwyn Capital Inc. (now Merrill Lynch Canada Inc.).

The IDA ordered the fine on Turcotte for failing to ensure that recommendations made for an account were appropriate for one of his clients. Turcotte also advised two clients to change the investment objectives on their RRSP new account application forms in order to conform with trading that had already occurred in the accounts.

Turcotte was fined $7000, has to pay back $588.50 in commissions, must re-write the Conduct and Practices Handbook exam, and his activities will be supervised for six months. In addition, Turcotte is required to pay $500.00 toward the IDA’s investigation costs.

The IDA found that in July 1995 Turcotte opened a margin account for an elderly client which indicated investment objectives to be 50% income, 25% medium term and 25% speculative investments. In September 1995, Turcotte started purchasing shares of speculative securities, namely Tee-Comm Electronics Inc. and Multi Corp. Inc., in the margin account. In October 1995, Turcotte purchased, sold and re-purchased shares of these securities in the margin account; by month end 48% of this account consisted of speculative securities.

Turcotte also opened an RRSP account for the same client as well as the client’s spouse. The investment objectives for the first client’s RRSP account were 50% long-term growth and 50% income. The spouse’s investment objectives were 100% long-term growth. At month end, October 1995, the first client’s RRSP account contained 26% holdings in speculative securities and the spouse’s RRSP account held 20% in speculative securities.

In November 1995, Turcotte advised these clients to change the investment objectives in their RRSP accounts to 75% long term and 25% speculative trading in order to conform to the trading that had already occurred in their accounts.
-IE Staff