A former rep has settled with the Investment Industry Regulatory Organization of Canada (IIROC), admitting to several rule violations including failing to question suspicious trading activity in a client’s account.
An IIROC hearing panel approved a settlement between IIROC staff and former CIBC World Markets Inc. rep Gregory Paul Bealer, who agreed to pay a $50,000 fine, $17,269 in disgorgement and $5,000 in costs to go along with a five-month suspension.
In the settlement, Bealer admitted to failing as a gatekeeper by facilitating suspicious trading in a client’s account, making unapproved off-book investments, and failing to designate several client accounts as pro-accounts.
The suspicious trading activity involved the account of the 68-year old stepfather of a cannabis company CEO. The trading in his account largely involved the company’s securities, with trading instructions coming from the CEO’s assistant, and the proceeds of a couple of trades being paid into the CEO’s account.
The activity in the account should have raised several red flags that the rep failed to act on — including the client’s relationship with the CEO, and the unusual trading based on the client’s profile — the settlement noted.
Additionally, the rep made eight unapproved off-book investments in private placements, largely in cannabis-related companies. He also failed to designate 18 different accounts as pro accounts and invested in numerous new issues in those accounts, which were not eligible to participate in new issues under CIBC policies.