The Ombudsman for Banking Services and Investments (OBSI) is aiming to “name and shame” yet another financial firm that is refusing its compensation recommendations.

OBSI said Wednesday that Victoria, B.C.-based mutual fund dealer, Connor Financial Corp., has declined to compensate several retail investors after it investigated client complaints and recommended that the investors receive compensation from the firm in four cases, ranging from a mere $250 to almost $200,000.

The dispute resolution service says that in three of the cases, clients were put into high-risk investments that were unsuitable given their personal and financial circumstances, investment objectives and/or risk tolerance, and that the firm is responsible for the recommendations that led to the unsuitable investments.

In the investigation reports for these cases, OBSI says that the advisor involved, who is also founder, president, and sole director, compliance officer, shareholder, and investment advisor of Connor Financial, did not recognize the products’ risks, and so, did not adequately disclose the risks to unsophisticated investors who relied on his advice.

The amounts ordered in those cases were $93,030, $54,109, and $189,878. OBSI notes that its recommended compensation amounts in the suitability cases are based on the difference between the amount the investors’ accounts should have been worth had they been suitably invested and the actual value when they removed their investments from the firm, plus interest.

“It has chosen not to fulfill its responsibilities to them by providing the compensation they are owed based on the facts of the case,” OBSI says.

In a fourth case, OBSI reports that a client incurred tax penalties when the firm inappropriately redeemed securities held in an RRSP to cover an investment loan. It says the firm rejected a settlement proposal of $250 in that case too.

In cases where a firm refuses OBSI’s recommendation for compensation, its only real enforcement power is to “name and shame” the firm involved. It has hardly used the power since it was established —between 2002 and 2012, it only did so once — but in the past couple of years, firms have grown more resistant to its recommendations, leading to a series of so-called “stuck cases”.

In an effort to break that logjam, OBSI offered a one-time independent review of certain cases, including the three suitability complaints in this case. The firm declined to take up this offer, OBSI says.

With this latest refusal, OBSI has now published eight refusals in its latest fiscal year, which ends Oct. 31. Earlier this year, as part of our Regulators’ Report Card research, Investment Executive asked industry compliance officers whether this “name and shame” effort has been effective. The majority (77%) of those who answered the question said “no”. A number of respondents to the survey suggested that OBSI needs the power to enforce its decisions, but that this must also be accompanied by greater oversight of its decisions.

Regulators are currently considering reforms to make OBSI the mandatory dispute resolution service for all firms under their jurisdiction, but they have yet to propose more substantive reforms to resolve the growing industry resistance to its compensation recommendations.