held-responsible-regulators

On April 4, 2013, a Hearing Panel of the Investment Industry Regulatory Organization of Canada (IIROC), accepted the Settlement Agreement, with sanctions, between IIROC staff and Reginald Alfred Groome.

Mr. Groome admitted to having failed in his duty to know the client, to ensure that the acceptance of orders was appropriate for his clients, and to fulfill his role of gatekeeper.

Specifically, Mr. Groome admitted to the following violations:

(a)         Between November 1, 2006 and June 30, 2008, while a Registered Representative with Union Securities, Mr. Groome failed to use due diligence to learn and remain informed of the essential facts relative to his clients who invested in Millenia Hope Bio-Pharma, thus contravening IIROC Dealer Member Rule 1300.1(a) (IDA Rule 1300.1(a) prior to June 1, 2008);

(b)         Between November 1, 2006 and July 31, 2008, while a Registered Representative with Union Securities, Mr. Groome failed to use due diligence to ensure that the acceptance of orders from his clients to invest in Millenia Hope Bio-Pharma were appropriate to these clients given their financial circumstances, their knowledge of investing, their investment objectives and their risk tolerance, thus contravening IIROC Dealer Member Rule 1300.1(p) (IDA Rule 1300.1(p) prior to June 1, 2008);

(c)         Between November 1, 2007 and July 31, 2008, while a Registered Representative with Union Securities, Mr. Goome engaged in business conduct or practice unbecoming or detrimental to the public interest and failed to fulfill his role of gatekeeper, by allowing his clients to make a private investment in Millenia Hope Bio-Pharma, whereas the company was under a cease trade order and, subsequently, an agreement not to seek financing from the public, thus contravening IIROC Dealer Member Rule 29.1 (IDA By-Law 29.1 prior to June 1, 2008).

Under the terms of the Settlement Agreement, Mr. Groome accepted the following penalties:

(a)         A fine of $65,000: $15,000 on count A, $15,000 on count B, $35,000 on count C;

(b)         Disgorgement of $24,198 representing the profit realized by reason of the violations;

(c)         A three-year suspension of approval in any capacity;

(d)        A 24-month period of strict supervision once the suspension is lifted; and,

(e)         Successful completion of the Conduct and Practices Handbook Course as a condition for re-approval;

Mr. Groome also agreed to pay costs in the amount of $5,000.

The Settlement Agreement is available here, and the decision of the Hearing Panel will be made available at www.iiroc.ca.

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 Mr. Groome’s conduct in February 2009. The alleged violations occurred when he was a Registered Representative with the Montréal branch of Union Securities Ltd., an IIROC-regulated firm. Mr. Groomeis no longer a registrant with an IIROC-regulated firm.

Also read:

Rep to pay $10,000 for faulty KYC

Rep fined, suspended over private placements

Rep fined over personal client dealings

IIROC loses client information

Originally published on Advisor.ca

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