IN THE MATTER OF William John Marston - Settlement

MONTRÉAL, April 13 /CNW/ - On February 1, 2010, a Hearing Panel of the Investment Industry Regulatory Organization of Canada ("IIROC") accepted a Settlement Agreement between IIROC Staff and William John Marston (the "Respondent"). Pursuant to the Settlement Agreement, the Respondent admitted to:

    
    TRANSACTIONS EFFECTED OFF-BOOK ON SECURITIES OF COMPANIES RELATED TO
    --------------------------------------------------------------------
    MOUNT REAL CORPORATION
    ----------------------

    (a) Between February 20, 2004 and November 3, 2005, or thereabouts, while
        in the employ of former Member firm iForum Securities Inc., the
        Respondent accepted approximately 72 orders from about 64 clients for
        the purchase or renewal of promissory notes of MRACS Management
        Limited and Real Vest Investments Inc., being securities other than
        mutual fund securities, having an approximate book value of
        $5,296,166.75, without such securities being recorded in the books of
        iForum Securities Inc., thereby engaging in business conduct
        unbecoming, contrary to By-law 29.1;

    SECURITIES OTHER THAN MUTUAL FUND SECURITIES HELD OFF-BOOK
    ----------------------------------------------------------

    (b) In November 2005, while in the employ of former Member firm iForum
        Securities Inc., the Respondent was responsible for the accounts of
        about 106 clients with B2B Trust, a trust company with a federal
        charter, where such clients held approximately 42 different
        securities, other than mutual fund securities, having an approximate
        book value of $10,781,394.28, without such securities being recorded
        in the books of iForum Securities Inc., thereby engaging in business
        conduct unbecoming, contrary to By-law 29.1;

    TRANSACTIONS INVOLVING ILLEGAL PROMISSORY NOTES OF COMPANIES RELATED TO
    -----------------------------------------------------------------------
    MOUNT REAL CORPORATION
    ----------------------

    (c) Between May 2004 and October 2005, while in the employ of former
        Member firm iForum Securities Inc., pursuant to instructions given by
        about 52 clients, the Respondent accepted approximately 55 orders for
        the renewal of promissory notes of MRACS Management Limited and Real
        Vest Investments Inc., evidencing an amount under $150,000, issued
        without a prospectus and without an exemption, contrary to ss. 11 and
        41(3) of the Quebec Securities Act (R.S.Q., c. V-1.1), thereby
        engaging in business conduct unbecoming, contrary to By-law 29.1;

    (d) Between November 2004 and November 2005, while employed with former
        Member firm iForum Securities Inc., pursuant to instructions given by
        approximately six (6) clients, the Respondent accepted approximately
        six (6) orders for the renewal of promissory notes from MRACS
        Management Ltd. and Real Vest Investments Ltd., evidencing a sum of
        $150,000 or more, without the notice stipulated in ss. 46 and 51 of
        the Québec Securities Act (R.S.Q., chapter V-1.1) having been given,
        thereby engaging in business conduct unbecoming, contrary to By-law
        29.1;

    DISTRIBUTION OF CONSOLIDATED PORTFOLIO STATEMENTS CONTAINING FALSE AND
    ----------------------------------------------------------------------
    MISLEADING INFORMATION
    ----------------------

    (e) Between February 2004 and October 2005, or thereabouts, while in the
        employ of former Member firm iForum Securities Inc., the Respondent
        distributed consolidated portfolio statements to about five (5)
        clients, which statements contained misrepresentations in that they
        overstated the value of the promissory notes of Real Vest Investments
        Inc. in relation to the actual value thereof, thereby engaging in
        business conduct unbecoming, contrary to By-law 29.1;

    FAILURE TO DISCLOSE A CONFLICT OF INTEREST
    ------------------------------------------

    (f) Between February 2004 and November 2005, or thereabouts, while
        employed with former Member firm iForum Securities Inc., the
        Respondent failed to inform his clients of the existence of a
        conflict of interest between iForum Securities Inc. and Mount Real
        Corporation before they purchased or renewed various promissory notes
        from MRACS Management Ltd. and Real Vest Investments Ltd., thereby
        engaging in business conduct unbecoming, contrary to By-law 29.1;

    INAPPROPRIATE RECOMMENDATIONS
    -----------------------------

    (g) On or about November 2, 2005, the Respondent advised his client FS to
        purchase a promissory note of Real Vest Investments Inc., evidencing
        an amount of $100,000, although such investment was unsuitable for
        such client owing to his age, investment knowledge, investment
        objectives and risk tolerance, thereby contravening IDA Regulation
        1300.1(p) and Standards A and C of the Conduct and Practices
        Handbook;

    FAILURE TO PROVIDE COMPLETE AND ACCURATE INFORMATION
    ----------------------------------------------------

    (h) On or about November 2, 2005, while in the employ of former Member
        firm iForum Securities Inc., the Respondent failed to provide his
        client FS with the complete and accurate information that he knew or
        should have known concerning Real Vest Investments Inc. before the
        client invested $100,000, thereby engaging in business conduct
        unbecoming, contrary to By-law 29.1;

    UNAUTHORIZED DISCLOSURE OF INFORMATION ABOUT A CLIENT
    -----------------------------------------------------

    (i) In December 2005 or thereabouts, the Respondent provided a third
        party with information concerning his client JB without such client's
        consent, thereby engaging in business conduct unbecoming, contrary to
        By-law 29.1.

    Pursuant to the Settlement Agreement, the Hearing Panel imposed the
    following penalties on the Respondent:

    (a) a permanent bar from approval, in any capacity, with the Investment
        Industry Regulatory Organization of Canada.
    

IIROC formally initiated the investigation into the Respondent's conduct on November 28, 2005. The alleged violations occurred while the Respondent was a Registered Representative with an Unrestricted Practice at the Montréal Branch of iForum Securities Inc. The Respondent is no longer a registrant with an IIROC regulated firm.

The Hearing Panel issued its Reasons and Decision on February 1, 2010. The Settlement Agreement and the Hearing Panel's Decision and Reasons are available at www.iiroc.ca.

IIROC is the national self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada. Created in 2008 through the consolidation of the Investment Dealers Association of Canada and Market Regulation Services Inc., IIROC sets high quality regulatory and investment industry standards, protects investors and strengthens market integrity while maintaining efficient and competitive capital markets. IIROC carries out its regulatory responsibilities through setting and enforcing rules regarding the proficiency, business and financial conduct of dealer firms and their registered employees and through setting and enforcing market integrity rules regarding trading activity on Canadian equity marketplaces.

SOURCE Investment Industry Regulatory Organization of Canada (IIROC) - General News

For further information: For further information: Carmen Crépin, Vice President, Québec, (514) 878-2854, ccrepin@iiroc.ca; Jeff Kehoe, Acting Vice President, Enforcement, (416) 943-6996, jkehoe@iiroc.ca


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