IIROC announces decision for Carolann Steinhoff

VANCOUVER, Nov. 2, 2011 /CNW/ - A Hearing Panel of the Investment Industry Regulatory Organization of Canada has found that Carolann Steinhoff violated IIROC rules by making discretionary purchases in a client account, making unsuitable use of margin, making unsuitable investments for clients and making a false statement to her firm's compliance department.

In its decision dated October 6, 2011, the panel also dismissed charges that Ms. Steinhoff failed to consider the rate of return for a client's investment, and that she failed to ensure that a client's account documentation was accurate.

The panel will schedule a hearing to determine the penalty against Ms. Steinhoff. The penalty hearing date will be made available at www.iiroc.ca.

Specifically, the panel found that Ms. Steinhoff:

  • Made 12 discretionary purchases in a client's account totaling $240,000, contrary to IIROC Rule 1300.4;
  • Purchased securities in a client's account using approximately $120,000 borrowed on margin when that level of margin was not suitable for the client, contrary to IIROC Rule 1300.1 (p) and (q);
  • Constructed a portfolio in a client's account which was not suitable for the client, contrary to IIROC Rule 1300.1 (p) and (q);
  • Recommended that a client continue with previously purchased investments even though the portfolio was not suitable for the client, contrary to IIROC Rule 1300.1 (q); and
  • Engaged in conduct unbecoming and detrimental to the public interest, contrary to IIROC Rule 29.1, by making a false statement to her firm's compliance department regarding her client's use of margin.

The panel also found that IIROC failed to prove that Ms. Steinhoff:

  • Failed to determine or consider the rate of return the client was seeking; and
  • Failed to ensure the New Client Application Form reflected the fact that the client's funds would be needed in approximately four months.

The violations occurred during the period of June to November 2008, while Ms. Steinhoff was a Registered Representative at the Victoria, BC branch of Wellington West Capital Inc., an IIROC-regulated firm. She is currently registered with the Victoria branch of Queensbury Securities Inc., an IIROC-regulated firm.

* * *

IIROC investigates possible misconduct by its member firms and/or individual registrants. It can bring disciplinary proceedings which may result in penalties including fines, suspensions and permanent bans or terminations for individuals and firms.

All information about disciplinary proceedings relating to current and former member firms is available in the Enforcement section of the IIROC website. Background information regarding the qualifications and disciplinary history, if any, of advisors currently employed by IIROC-regulated firms is available free of charge through the IIROC AdvisorReport service. Information on how to make investment dealer, advisor or marketplace-related complaints is available by calling 1.877.442.4322.

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:

Warren Funt
Vice President, Western Canada
          Elsa Renzella
Director, Enforcement Litigation


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