An Investment Industry Regulatory Organization of Canada (IIROC) hearing panel has suspended Krishna Sammy, a former advisor who is no longer registered, for five years and fined him $250,000 after it found that he advised clients to buy securities that he was simultaneously selling from his personal account and that he made unsuitable recommendations to several clients.
The IIROC hearing panel said that Sammy, who was a registered rep, portfolio manager and a supervisor with DWM Securities Inc. in Brampton, Ont., at the time of the violations, did not disclose the conflict of interest. However, the panel also noted that there were no direct crosses between the client accounts and his accounts, and that there is no evidence that clients lost any money as a result.
Nevertheless, the IIROC hearing panel stressed that a “conflict of interest is something that strikes at the heart of a client’s right to security in the capital markets. A strong message must be sent that it cannot be tolerated. A penalty would not be adequate if it did not include a fine and a suspension.”
IIROC staff sought a permanent ban against Sammy, but the panel ruled that a lifetime ban is not warranted in this case, noting that it was neither alleged, nor proven, that his actions were calculated, deceitful, or dishonest. Instead, it ordered that a five-year suspension is appropriate.
However, the suspension also carries the condition that Sammy cannot be considered for re-approval until he has paid the $250,000 fine and $75,000 in costs that were also handed down in the case.
The IIROC hearing panel also denied Sammy’s option for a stay of any penalty against him, pending an appeal to the Ontario Securities Commission, which was filed in February. In dismissing the application for a stay, the panel said that it is “entirely without merit.”