MONTREAL, Dec. 17 /CNW/ - A Hearing Panel of the Investment Industry Regulatory Organization of Canada (IIROC) has accepted a Settlement Agreement, including sanctions, between IIROC Staff and Alain Béland.
In the agreement, Mr. Béland admits to engaging in conduct unbecoming and detrimental to the public interest, contrary to IIROC Rule 29.1, and failing to ensure investment recommendations to his clients were consistent with their objectives and risk tolerance, contrary to IIROC Rules 1300.1(a) and 1300.1(p).
Mr. Béland has accepted a permanent ban on approval in any capacity with an IIROC-regulated firm. He also agreed to pay costs of $15,000.
Specifically, Mr. Béland admits that he:
- facilitated the off-book purchase of shares in a public company by a client, who in fact was his spouse, directly from insiders, without disclosing the proposed trade to his firm;
- failed to ensure that investment recommendations regarding three clients were consistent with their investment objectives and risk tolerance;
- arranged with another representative on his team to settle the complaints of these three clients by compensating them, all without the knowledge of the firm;
- recommended certain securities, despite the fact he, his spouse and representatives on his team held these securities in personal accounts and had purchased them through Mr. Béland, who had a privileged connection with insiders of these companies, who were also clients of the team, and that, at December 31, 2005, 248 of the team's accounts held approximately 18.5% of the outstanding shares in one company and 128 accounts held approximately 1.5% of the outstanding shares in another;
- took part in a private placement in a public company for his own account, without disclosing the proposed trade to his firm;
- arranged for the participation of a client in an over-the-counter investment in the stock of a certain company, without prior disclosure of the proposed trade to the firm;
- falsely represented that the assignment of shares in a firm to a certain client had been completed free of charge, when in fact it was completed for $6,000;
- allowed a client to make an over-the counter investment in a stock through the company's president, by way of an exchange in her RRSP account, without prior disclosure of the proposed trade to the firm;
- failed to protect the public in connection with numerous trades in certain securities by a client who happened to be a consultant for these companies, when he knew or should have known that the trades were or could have been an indication of market manipulation;
- purchased securities of a public company directly from a client with insider ties to that company, without prior disclosure of the proposed trade to the firm; and
- took part in a private placement in a public company for his own account, without prior disclosure of the proposed trade to the firm.
The violations occurred between 2004 and 2006, while Mr. Béland was a Registered Representative with the Brossard Branch of Desjardins Securities Inc. IIROC began its investigation into Mr. Béland's conduct on November 10, 2006. Mr. Béland is no longer a registrant with 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.
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