A former portfolio manager has been fined and banned for 15 years in a settlement with the British Columbia Securities Commission (BCSC) after admitting to suitability failures.
The BCSC ordered that Albert Alan Housego, a former portfolio manager and exempt market dealer rep with Crystal Wealth Management System Ltd. in B.C., be fined $150,000 and banned for 15 years for suitability violations.
According to the settlement, Housego managed four investment funds for Crystal Wealth, and provided discretionary account management for almost 500 clients.
In 2016 after a mining company defaulted on a $10-million investment from one of those funds — which represented about 50% of the fund’s assets under management — Housego put at least 260 of his clients into the fund with a combined investment of almost $1 million.
He also invested $4.25 million of one of his funds’ assets in gold subscription agreements without properly understanding the investment, the settlement agreement said, and put at least 323 of his clients into that fund, investing a combined $6.7 million.
As a result, he admitted to not meeting his suitability obligations.
The settlement noted that Housego cooperated with the regulator’s investigation and that he agreed to make early admissions about his misconduct.
In 2018 the Ontario Securities Commission (OSC) reached a settlement with the founder of Crystal Wealth, Clayton Smith, banning him permanently and fining him $250,000 after finding that he “engaged in fraud, and breached his duty to act fairly, honestly and in good faith with clients,” by misappropriating millions from two funds.
And in 2020 the OSC settled with the Crystal Wealth funds’ auditor, BDO Canada LLP, which agreed to a $3.5-million penalty and $500,000 in costs for its deficient audits of the two funds.