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Byron Capital Markets Ltd. has refused an OBSI compensation request in the amount of $41,149.

Read: OBSI defies common sense

Byron Capital is an investment dealer based in Toronto that recently ceased most operations and whose application to resign from IIROC is pending approval. The complainant, Mr. B, was a low- to medium-risk investor who owned a general business consulting firm and who was approaching retirement. His primary concern was the stability and continuity of income from his investments.

Mr. B’s advisor at Byron Capital, Mr. W, recommended that he purchase high-risk, complex leveraged structured products in his small business account that OSBI says were unsuitable given his risk tolerance and investment objectives.

Although he had good investment knowledge, Mr. B reasonably relied on his advisor’s characterization that these were medium-risk investments and was not aware that they were in fact higher-risk, according to OBSI.

Read: OBSI defends naming and shaming

The ombudsman says Byron Capital is responsible for the financial harm incurred by Mr. B as a result of the unsuitable investments.

OBSI’s recommended compensation amount was arrived at by first calculating the difference between the amount Mr. B’s investments would have been worth had he been suitably invested and the actual value as of the date he closed his corporate account with Byron Capital. Interest was then added to compensate Mr. B for the loss of use of his money, calculated from the date he first complained to the firm.

A copy of OBSI’s investigation report for Mr. B’s complaint is available on OBSI’s website.

Also read:

Give OBSI enforcement powers, says investor panel

Richardson GMP refuses OBSI request

Armstrong & Quaile refuses OBSI request

Another firm refuses OBSI compensation request

Originally published on Advisor.ca

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