The Investment Industry Regulatory Organization of Canada (IIROC) has suspended Steve Duchaine, an advisor in Quebec City, for one year as well as ordered him to pay a fine and reimburse commissions in connection with five infractions.

Duchaine, who was a registered representative with Laurentian Bank Securities Inc. between March 2010 and August 2011, when the infractions occurred, was accused of:

  1. Misrepresenting to several clients that the principal amount of a corporate debenture was 100% guaranteed upon maturity when it was actually a non-guaranteed debenture.
  2. Recommending and acquiring securities that were unsuitable for a client’s investment objectives and time horizon to generate commissions.
  3. Recommending and substituting bonds in a client’s portfolio, also for the purpose of generating commissions.
  4. Executing transactions on clients’ accounts and charging commissions that were not within the bounds of good business practice.
  5. Forging a client’s signature to complete a retirement savings plan application form.

Duchaine was ordered to pay a fine of $57,500; pay IIROC costs of $5,000; and reimburse the commissions generated on transactions connected to the first four infractions in the amount of $5,004. In addition, IIROC suspended Duchaine’s registration for one year from the date of the decision, which was rendered on Dec. 22, 2014, according to the penalty decision that was released publicly on Monday.

Duchaine is required to rewrite the Conduct and Practices Handbook exam for securities industries professionals successfully before seeking re-approval. If Duchaine is re-approved, he must be under strict supervision for 12 months, which includes the mandatory submission of monthly supervision reports to IIROC’s registration department.

Although Duchaine pled guilty to the first four counts, he insisted at an IIROC hearing on Nov. 6, 2014 that he had not committed the act of forging his client’s signature in February 2011.

However, IIROC’s hearing panel determined Duchaine’s guilt in the fifth infraction through the testimony of various witnesses, including the advisor’s assistant, referred to as “SM,” and branch manager, “SB.”

SM told the hearing panel that Duchaine tried to give her a document that was missing a client signature. When she informed the advisor of this fact, she said Duchaine then went into his office and returned to her 30 to 60 seconds later with a signed form. SM said she knew Duchaine had signed the document himself because he did not have a client in his office.

SB testified that he spoke to Duchaine regarding the incident and Duchaine had promised to not repeat the infraction.

Both witnesses testified that Duchaine did not protest when they approached him about the situation.

Although Duchaine said that he had denied admitting guilt, the hearing panel found that his testimony was not credible.

“In short, the hearing panel has the testimony of two individuals with no interest in the outcome of the proceeding, nor any reason to hold a grudge against the respondent,” IIROC’s decision states. “On the other hand, the respondent, whose interest in the outcome of the proceedings is evident, offers no reasonable explanation for his failure to protest when his assistant rejected the form and when his branch manager criticized his conduct.”

The IIROC decision notes that Duchaine is no longer a registrant with an IIROC-regulated firm.