The Toronto-based Investment Industry Regulatory Organization of Canada (IIROC) has fined Donald Kochan of Cambridge, Ont. $50,000 for purchasing unsuitable securities for clients and making unauthorized trades.
Kochan, who was a financial advisor with Dundee Securities Corp. at the time, purchased high-risk securities for two clients between March 2004 and December 2010. The original Know-Your-Client (KYC) forms indicated that both clients wanted zero percent of their portfolios to contain high-risk securities. Both KYC forms were updated to include some level of high-risk, according to IIROC, however, the clients were either unaware of the updates or refused to sign the new form.
Furthermore, between January 2007 and December 2010, Kochan made multiple trades on behalf of three clients without their authorization. Indeed, according to IIROC, the clients were not even aware that Kochan was obligated to inform them of the trades before execution.
In its settlement agreement IIROC notes that Kochan personally reimbursed one of the clients who had lost $35,000. As well, the regulator found no evidence that Kochan was dishonest or deceitful and he co-operated fully with IIROC’s investigation.
Since 2011, Kochan has been a registered representative with National Bank Financial Inc. who has strictly monitored his account for 21 months.
In addition to the fine, IIROC also ordered Kochan to disgorge $13,000 in commissions and to pay costs of $2,500.