A Toronto broker who churned a client’s account has been fined $45,000 and suspended from the industry for 10 years.
The Investment Dealers Association of Canada said Hong Xiao must also return $5,051.50 in commissions, pay $25,000 in costs and re-write the Conduct and Practices Handbook exam before getting back into the industry. She will then be subject to strict supervision for a period of two years after her suspension. At the time, Xia was a rep with the Toronto office of Gorinsen Capital Inc., then went to Westminster Securities Inc. and was most recently at Argosy Securities Inc.
Xiao admitted to excessive trading in her client’s account between February and October 1999 and to then agreeing to compensate the client in an amount equal to the client’s initial investment. The agreement and a partial payment were made without the knowledge of Xiao’s firm.
The IDA said that it had accepted a settlement agreement negotiated between Xiao and association staff.
In two other cases:
- Marlow Group Securities Inc. was fined $30,000 for failing to maintain its risk-adjusted capital above zero. Now Marlow must maintain a positive RAC of $100,000 for 12 months and pay $4,000 in costs. In addition, Terrence Marlow cannot be chief financial officer while he holds any other executive position at Marlow Group.;
- Derek Jansen, who worked at a Toronto branch of TD Evergreen, a division of TD Securities Inc., was fined $25,000 for trading without client orders. He must also rewrite the Conduct and Practices Handbook exam and pay costs of $5,000.