Industrial Alliance Securities Inc. has been fined $50,000 by the Investment Industry Regulatory Organization of Canada (IIROC) for failing to adequately supervise a registered representative.
According to IIROC documents, in 2010, a registered rep with Industrial Alliance entered into a commission sharing agreement to purchase a book of business from Julius Vitug. Vitug was permanently barred from IIROC approval in 2009. The rep had been Vitug’s assistant for some time prior to the agreement. The rep and Vitug, who still has an insurance license, continued to work in the same office building.
As part of the commission agreement, Vitug was to have no contact with his former clients and had given verbal assurances to Industrial Alliance that such was the case. According to IIROC, Industrial Alliance is unaware of any contact between Vitug and his former clients.
In 2011, Industrial Alliance compliance staff became concerned about unsolicited speculative stocks purchased for the rep’s clients, according to IIROC. The member firm terminated the agency agreement with the rep in 2012.
IIROC began investigating the rep in 2011 but subsequently withdrew its allegation of a regulatory contravention in 2014 following a reassessment of the case.
Industrial Alliance Securities Inc. is a wholly owned subsidiary of Quebec City-based Industrial Alliance Insurance and Financial Services Inc. (TSX:IAG).