A mutual fund salesman whose inappropriate investments cost clients more than $1 million has been banned from the industry and penalized $45,000 by the Alberta Securities Commission.

Donald Wallace sold funds through his own company, Achievement Ventures Ltd., from 1988 to 1999 and was then a branch manager for Summit Securities and its successor firm, Summit Aurum.

At a hearing before an ASC panel, Wallace admitted that he failed to adequately understand the investment needs of his clients, as required by securities laws, and recommended unsuitable investments. He also recommended that some clients incur debt to buy and maintain those investments, resulting in huge losses.

The ASC said Friday that Wallace admitted conducting discretionary trades in client accounts, which was outside the conditions of his registration as a mutual fund salesperson and contrary to the Securities Act.

In one case, an elderly couple lost about $150,000 by following Wallace’s improper advice and instructions. He had over 1,100 clients and assets exceeding $55 million under his management.

“His (Wallace’s) behaviour demonstrated not only ignorance or disregard of his most basic duties as a registrant but also complete disregard for the meaning of registration, for the privileges and corresponding burdens that accompany registrant status, and indeed for Alberta securities laws generally,” an ASC panel in its decision.

Wallace was ordered to pay an administrative penalty of $30,000 and $15,000 toward costs of the investigation. In addition, he is prohibited from trading in securities for 15 years, with exceptions related to his RRSP and personal trading accounts.