The Investment Industry Regulatory Organization of Canada (IIROC) Friday announced the sanctions it has imposed on a British Columbia advisor over alleged suitability violations, but the penalties are stayed pending a review of the case by the B.C. Securities Commission (BCSC).

IIROC formally initiated the investigation into the conduct of Carolann Steinhoff, a former registered representative at the Victoria branch of Wellington West Capital Inc., in November 2008.

IIROC said Friday, that following a penalty hearing in February 2012, an IIROC panel has imposed a $100,000 fine on Steinhoff and ordered her to disgorge commissions of $6,813.

The panel also suspended her registration for 12 months, and ordered she be subject to 12 month periods of “strict” and “close” supervision for a total 24 months.

It addition the panel imposed a five-year prohibition from Steinhoff serving as a director or officer of an IIROC member firm.

Steinhoff also must pay $20,000 in costs, and is ineligible for reinstatement until she has paid the fine, disgorgement and costs, and passed both the Partners Directors and Officers Course and the Branch Managers Course.

The penalty follows a decision by an IIROC hearing panel on Oct. 6, 2011, which found that Steinhoff made discretionary purchases in a client’s account, used margin unsuitably, and put clients in unsuitable investments.

B.C. broker violated IIROC rules: panel

However, the sanctions issued by IIROC have been stayed pending a review by the BCSC of both the liability and the penalty decisions from the IIROC panel.

According to the July 12 BCSC order granting the stay, IIROC consented to Steinhoff’s request for a stay, and the BCSC granted it, until the review is complete.

Earlier this week, the Supreme Court of B.C. dismissed a suit from Steinhoff against IIROC, in which she alleged that it conducted a biased disciplinary hearing against her, and failed to hand down its penalty in a timely manner.

B.C. advisor loses bid for court review of IIROC decision

The court declined to hear the case, saying that it doesn’t have jurisdiction, and that the BCSC must review IIROC decisions. The BCSC’s decisions are, in turn, open to judicial review.

Steinhoff is currently registered in Victoria with Queensbury Securities Inc.