Echoing a decision by the Investment Industry Regulatory Organization of Canada (IIROC), the BC Securities Commission (BCSC) has also permanently banned a former investment advisor who lied about passing a financial planning course and forged a transcript to cover up that fact.
The BCSC said Thursday that a hearing panel has permanently banned Dirk Lohrisch from purchasing securities or exchange contracts and from acting as a director or officer of any issuer or registrant. He is also permanently banned from becoming a registrant, investment fund manager, or promoter, from acting in a management or consultative capacity in connection with the securities market, and from engaging in investor relations activities.
Lohrisch was already banned by IIROC in 2010 after a hearing where he didn’t dispute the allegations against him. But the securities commission felt that it was necessary to extend the prohibition to the capital markets generally in B.C.
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In reaching its decision, the panel relied largely on the evidence from IIROC’s hearing, which found that he submitted a registration form to IIROC that was misleading about his credentials, by claiming that he passed a required financial planning course when he’d actually failed it. This went undiscovered for almost six years, until in 2009, when IIROC asked for proof that he had indeed passed the course. He then submitted a forged a transcript to IIROC. And, it said he also attempted to obstruct its investigation.
The IIROC panel imposed a permanent ban on Lohrisch from approval in any capacity, fined him $40,000 and ordered him to pay costs of $27,000.
The BCSC panel also found that Lohrisch’s conduct was contrary to the public interest and warranted orders broader than those able to be imposed by IIROC. “The integrity of registrants is especially important to investor confidence. A registrant who makes a mistake, even a dishonest one, and remedies it, is one thing. A registrant whose dishonesty continues and escalates as the pressure increases is quite another. That evinces a character flaw that is inconsistent with credible participation in the capital markets. As the IIROC panel recognized, honesty is the central value for registrants,” the panel said.
“Not only has Lohrisch followed a path of dishonesty, he shows no remorse. How could investors have confidence in a market that would tolerate that misconduct? On what basis could we impose less than permanent sanctions when there is no evidence that he acknowledges that he has done anything wrong?” it added.