The Investment Industry Regulatory Organization of Canada (IIROC) has fined a former Toronto-based advisor $100,000 and imposed a five-year suspension from registration with IIROC for failing to ensure his recommendations were suitable, and for engaging in discretionary trading in non-discretionary accounts for one specific client.

The violations stem from Probhash Mondal’s relationship with a client referred to as “AM” in the IIROC decision, released on Tuesday. AM is described as a widowed client who had approximately $2 million to invest. She requested an investment portfolio that would generate an income and emphasized the importance of capital preservation. The infractions occurred while Mondal was a registered representative with the Toronto branches of Raymond James Ltd. and Macquarie Private Wealth Inc. (which has since been bought by Richardson GMP Ltd.).

IIROC found Mondal’s first violation to be a failure to ensure that recommendations made between January and November 2010 were suitable for AM.

This began with the opening of five margin accounts between Feb. 23 and Apr. 2, 2009, while Mondal was an advisor at Raymond James. Within three months, AM’s risk tolerance was updated from 80% low, 10% medium and 10% high risk, to 100% high risk on new client application forms (NCAFs) for the accounts. This change did not reflect AM’s true risk profile, according to the settlement agreement.

“There is no documentary evidence that Mondal explained the risks associated with the use of margin to AM; however she had an opportunity to review the NCAFs and updates for the accounts,” states the IIROC document.

Over the 21-month period during which the margin accounts were held at Raymond James, Mondal recommended trades and engaged in trading activity that included a significant use of margin, frequent short-term trading, short selling, single stock concentration and growing debit balances, all of which were found to be unsuitable for AM.

IIROC notes that the client relied on Mondal’s recommendations for every trade in her accounts, although she did check her paper and online statements to view her accounts on a regular basis, which sometimes meant several times a day.

Between January and November 2010, unrealized and realized losses in the accounts totalled approximately $570,000. In the same period, Mondal earned approximately $60,000 in commissions as a result of the activity in the accounts, which also represented his single largest source of all commissions, according to the settlement agreement.

The second violation concerns discretionary trading that occurred between March and April 2011 in accounts that were not approved and accepted as discretionary accounts.

IIROC found that Mondal executed approximately 45 trades in AM’s account when he knew his client was away on vacation. These trades were conducted “on the basis of discussions that took place some time before execution; however Mondal did not formally document the discussions,” according to the settlement agreement.

AM’s accounts were closed in September 2011, when Macquarie’s compliance department prompted the action.

IIROC began the investigation into Mondal’s conduct in April 2014. He is no longer a registrant with an IIROC-regulated firm.