The Investment Industry Regulatory Organization of Canada (IIROC) has fined a Raymond James Ltd. branch manager in Kingston, Ont. $15,000 for failing to properly supervise a registered representative.
On June 26, IIROC an IIROC hearing panel accepted a settlement agreement, with sanctions, between IIROC staff and Paul Richardson.
Richardson admitted that, between December 2007 and July 2009, he failed to fully and properly supervise, Stephen Peirson, a registered rep at his branch, and his client activities.
The settlement agreement notes that Peirson recommended margin borrowing to some of his elderly clients. More specifically, he recommended the use or increase of margin borrowing to two clients for whom this was not suitable based on information recorded on their respective new account application forms.
Although Richardson identified the increasing margin borrowing in the client accounts and spoke to some of Pierson’s clients to confirm they were comfortable with the investment strategy, he did not speak specifically to the two clients directly to ensure that this strategy was appropriate for them.
As penalty, Richardson agreed to a $15,000 fine and a one-month suspension. He also agreed to successfully re-write the Branch Managers Course within 12 months, and to pay $2,000 in costs.
IIROC formally initiated the investigation into Richardson’s conduct in October 2010. He is still employed with the Kingston, Ont. branch of Raymond James Ltd.