A hearing panel of the Investment Industry Regulatory Organization of Canada has found that a British Columbia broker 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.

The violations occurred during the period of June to November 2008, while Carolann Steinhoff was a registered representative at the Victoria branch of Wellington West Capital Inc.

In its decision dated October 6, the panel also dismissed charges that 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.

Specifically, the panel found that Steinhoff:


  • Made 12 discretionary purchases in a client’s account totaling $240,000;
  • 
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;
  • Constructed a portfolio in a client’s account which was not suitable for the client;
  • Recommended that a client continue with previously purchased investments even though the portfolio was not suitable for the client; and

  • Engaged in conduct unbecoming and detrimental to the public interest, 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 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 panel will schedule a hearing to determine the penalty against Steinhoff.

Steinhoff is currently registered with the Victoria branch of Queensbury Securities Inc., an IIROC-regulated firm.