A former investment dealer must pay more than $25,000 in penalties for violating his association’s bylaws.
The Alberta District Council of the Investment Dealers Association of Canada (IDA) has imposed the disciplinary penalties against Brian Robert Strong, who worked for the Calgary branch of Research Capital Corp.
The violations, which took place between 1997 and 2002, included extending a personal loan to two clients; offering compensation to a client for account losses; and failing to make appropriate margin and trade recommendations for clients.
One of Strong’s clients, identified only as B.I., had the presence of mind to record a conversation he had with Strong when he called Strong about losses on his account.
In that recording, Strong clearly offers to provide a personal cheque to cover such losses, a breach of IDA bylaws.
In a second set of cases, the IDA found that Strong adjusted, without authorization, the rating to 100-per-cent high risk instead of 20-per-cent high risk of a semi-retired couple’s accounts.
Strong chose leveraged investments, based on money from a $240,000 house the couple had sold, that had neither the risk nor allocation that his clients would have been comfortable with.
Losses exceeded $100,000 and when the couple’s accounts faced margin calls and were subject to trade restrictions, Strong lent them his own money.
Neither of the two clients, whom Strong had met when he was a real estate agent, had much investment experience and both were afflicted with serious physical ailments.
Strong must now pay $25,000 in fines plus cover $4,500 in investigative costs.He is also subject to three months of close supervision should he decide to re-establish himself as a registered investment dealer.
He has not practised since October 2003.
The censure came about through a settlement last summer, but only last week did the IDA release details via a media release.