A hearing panel of the Investment Dealers Association of Canada has permanently barred a Vancouver man for unauthorized trading in client accounts.

John Frederick Pryde was an approved person employed with the Vancouver office of Brink, Hudson & Lefever Ltd. and Canaccord Capital Corp.

On Sept. 26, 2005, the IDA panel accepted a settlement agreement negotiated between Pryde and IDA staff.

Pryde admitted to the following:

  • Between July 1997 and Oct. 31, 1998, while employed by Brink, Hudson & Lefever, he effected approximately 414 discretionary trades in the accounts of 14 clients without the prior knowledge or written authorization of the clients and without the client accounts being designated as discretionary accounts.
  • Between Nov. 1, 1998, and June 26, 2001, while employed by Canaccord, he effected approximately 463 discretionary trades in 211 client accounts without the prior knowledge or written authorization of the clients.
  • Between Feb. 15, 2001, and Mar. 30, 2001, he caused Canaccord to convert five client cash accounts into margin accounts without receiving contemporaneous consent from the clients to do so, without giving notice, without considering whether the conversion was suitable for the clients, and for the purpose of circumventing the IDA’s Cash Account Rule.

The IDA said all of the unauthorized trades that Pryde made in client accounts were made without regard to the risks of the investments or the suitability of the investment for the client.

Due to his state of mental health between July 1997 and June 2001, the IDA said Pryde posed a significant threat of loss to his clients, the two firms, the capital markets, and the public interest, and that he was aware of the threat.

Pryde admitted that during the periods in which the breaches were committed, he was suffering from severely deteriorated mental health. He did not resign from his role as an approved person even though he was aware of the threat he constituted.

For his misconduct, Pryde was permanently banned as an approved person by the IDA.

He was ordered to co-operate in any further investigations and hearings, and he must pay $20,000 in costs.

Pryde is not employed as an IDA registrant.

For a complete summary of facts, please see IDA Bulletin 3475 at www.ida.ca or www.accovam.ca. DA expels John Frederick Pryde.