Investment firm worker recommended unsuitable investments to client worth $61,000
For investment firms, putting clients' money at risk could lead to consequences, as one British Columbia company recently found out.
A North Vancouver investment firm and two of its employees were fined for failing to ensure investments were suitable for their clients, according to the British Columbia Securities Commission (BCSC).
Ascenta Finance, Matthew Herbert Calvert and Chief Compliance Officer Tracy Anne Mabone must pay a total of $55,000 for their violations.
Calvert admitted that he recommended five unsuitable investments to three investors between 2016 and 2019 while working for Ascenta as an exempt market dealing representative. The investments, which totalled $61,000, were not appropriate for the investors' individual risk profiles.
Meanwhile, both Ascenta and Mabone admitted that they failed to maintain records demonstrating the firm's compliance with suitability requirements during the same time period. In total, they failed to maintain appropriate records for 111 clients.
Luckily, none of the investors affected by the misconduct lost money on the investments, said the BCSC, citing evidence it obtained.
Last year, the federal government’s switch in providers to the Public Service Health Care Plan (PSHCP) apparently caused issues for public service workers, and a parliamentary committee investigated the situation.
As part of the settlement agreement with the BCSC, Calvert has paid $30,000 and Ascenta and Mabone have paid a combined $25,000 for their wrongdoing.
“Calvert's registration as a dealing representative has been subject to terms and conditions, including external compliance monitoring, since 2019. The monitor has not reported any subsequent violations,” said the BCSC.
“For its part, Ascenta's registration also was placed under independent compliance monitoring and strict supervision. Although the conditions have since lapsed, Ascenta has voluntarily continued to send supervision reports to the BCSC, and paid an additional $18,500 in costs to the BCSC for its compliance review.”
Previously, one employer was fined for hiring a priest to make workers confess “workplace sins”.