A former mutual fund rep was sanctioned in a settlement with regulators, after putting several clients into an unapproved outside business venture that ultimately failed.
A hearing panel of the Canadian Investment Regulatory Organization (CIRO) accepted a proposed settlement between staff of the self-regulatory organization and Henry Griffioen, a former rep with Quadrus Investments Services Ltd. in London, Ont., who admitted to engaging in outside securities business and falsifying client notes in connection with that activity.
In settling the allegations, Griffioen agreed to a permanent ban from the industry, a $75,000 fine, and to pay $5,000 in costs.
According to the settlement, Griffioen admitted to violating the SRO’s rules between November 2017 and September 2020, when he facilitated investments by six clients and one non-client in a consumer financing business (Advantagewon Capital Corp.) via the sale of promissory notes.
Some of the clients redeemed mutual funds to invest in the promissory notes, but Griffioen falsely indicated that these redemptions were for other reasons, such as funding travel and home renovations, in his records.
In total, the investors lost $1.16 million (plus unpaid interest) when, in December 2021, the company failed. Griffioen also lost the $600,000 that he invested in the business.
The settlement noted that he didn’t receive any direct financial benefit from his misconduct, apart from the possibility of profiting indirectly on the business of Advantagewon if it had succeeded — and directing clients to help finance the venture.
It also said that he accepted responsibility for the regulatory violations and that he had no previous disciplinary history.
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