Enforcement Notice Decision - IN THE MATTER OF Frédéric Lavoie - Discipline Decision - Liability and Penalty
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Investment Industry Regulatory Organization of Canada (IIROC) - General NewsOct 15, 2013, 16:06 ET
MONTRÉAL, Oct. 15, 2013 /CNW/ - Following a disciplinary hearing held on May 22, 2013, in Montréal, Québec, a Hearing Panel of the Investment Industry Regulatory Organization of Canada (IIROC) found Frédéric Lavoie liable for the following violations: failing to use due diligence to ensure that he had the necessary knowledge of the features and risks inherent in leveraged Exchange-Traded Funds before recommending such an investment to his clients, and failing to inform his employer that he was engaging in an outside business activity.
The Hearing Panel's decision, dated September 3, 2013, is available at
http://docs.iiroc.ca/DisplayDocument.aspx?DocumentID=D89F615BAB214379AB9086C912205031&Language=en.
Specifically, the Hearing Panel ruled that Mr. Lavoie did commit the following violations:
| (a) | Between March 8, 2008 and March 2, 2009, Mr. Lavoie failed to use due diligence by neglecting to ensure that he had the necessary knowledge of the features and risks inherent in leveraged Exchange-Traded Funds before recommending such an investment to two of his clients, contrary to IIROC (formerly the IDA) Dealer Member Rule (By-Law) 1300.1(a); |
| (b) | Between March 8, 2008 and March 2, 2009, Mr. Lavoie failed to use due diligence by neglecting to ensure that his investment recommendations in leveraged Exchange-Traded Funds constituted a suitable investment for two of his clients, given their financial and personal circumstances and their investment objectives, contrary to IIROC (formerly the IDA) Dealer Member Rules (By-Law) 1300.1(a), (p) and (q); and |
| (c) | Between January 20, 2006 and April 30, 2009, Mr. Lavoie engaged in an outside business activity without the knowledge of the IIROC Dealer Member with whom he was employed and without the latter's consent, contrary to IIROC (formerly the IDA) Dealer Member Rule (By-Law) 29.1. |
The Hearing Panel imposed the following penalties on Mr. Lavoie:
| (a) | A fine in the amount of $45,000; |
| (b) | A two-year suspension of approval in any capacity with an IIROC-regulated firm; |
| (c) | Strict supervision for 12 months, with monthly reports from his employer, in the event of his re-approval with an IIROC-regulated firm; and |
| (d) | Repeat and pass the Conduct and Practices Handbook Course within six months following his re-approval with an IIROC-regulated firm. |
The Hearing Panel also ordered Mr. Lavoie to pay IIROC costs in the amount of $40,000.
Documents related to ongoing IIROC enforcement proceedings - including Reasons and Decisions of Hearing Panels - are posted on the IIROC website as they become available. Click here to search and access all IIROC enforcement documents.
IIROC formally initiated the investigation into Frédéric Lavoie's conduct in May 2011. The violations occurred when Mr. Lavoie was a Registered Representative with the Sainte-Foy branch of Laurentian Bank Securities Inc., an IIROC-regulated firm. Mr. Lavoie is no longer a registrant with an IIROC-regulated firm.
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IIROC is the national self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada. Created in 2008 through the consolidation of the Investment Dealers Association of Canada and Market Regulation Services Inc., IIROC sets high quality regulatory and investment industry standards, protects investors and strengthens market integrity while maintaining efficient and competitive capital markets.
IIROC carries out its regulatory responsibilities through setting and enforcing rules regarding the proficiency, business and financial conduct of dealer firms and their registered employees and through setting and enforcing market integrity rules regarding trading activity on Canadian equity marketplaces.
IIROC investigates possible misconduct by its member firms and/or individual registrants. It can bring disciplinary proceedings which may result in penalties including fines, suspensions and permanent bans or terminations for individuals and firms.
All information about disciplinary proceedings relating to current and former member firms is available in the Enforcement section of the IIROC website. Background information regarding the qualifications and disciplinary history, if any, of advisors currently employed by IIROC-regulated firms is available free of charge through the IIROC AdvisorReport service. Information on how to make investment dealer, advisor or marketplace-related complaints is available by calling 1 877 442-4322.
SOURCE: Investment Industry Regulatory Organization of Canada (IIROC) - General News
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