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.
For further information: Carmen Crépin, Vice President, Québec, (514) 878-2854, [email protected]; Jeff Kehoe, Acting Vice President, Enforcement, (416) 943-6996, [email protected]
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