Armstrong & Quaile refuses OBSI request

By Staff | April 25, 2014 | Last updated on April 25, 2014
2 min read

The Ombudsman for Banking Services and Investments (OBSI) has announced the refusal of Armstrong & Quaile to compensate a retired couple in excess of $34,000.

Read: OBSI defies common sense

Armstrong & Quaile is a mutual fund dealer based in Manotick and Waterloo, Ontario, with more than 200 licensed sales associates in branch offices across Canada. The complainants, Mr. and Mrs. H, were retired and living on CPP and OAS payments.

Their advisor at Armstrong & Quaile, Mr. O, recommended a strategy of borrowing money to invest, which OBSI says was unsuitable given the complainants’ personal financial situation and risk tolerance. Mr. and Mrs. H suffered losses in excess of $34,000 as a result of the leverage strategy when the value of their investments fell and they sold them to cover as much of their investment loan as was possible.

OSBI says Armstrong & Quaile is responsible for the financial harm incurred by the complainants as a result of the leverage strategy recommended by the advisor. The firm has chosen not to comply with OBSI’s restitution recommendation.

Read: Richardson GMP refuses OBSI request

A copy of OBSI’s investigation summary for Mr. and Mrs. H’s complaint is available on OBSI’s website.

Heather Phillips, Armstrong & Quaile’s CEO, and Mike Elliott, chief compliance officer, have taken issue with aspects of OBSI’s press release.

They say they have no objections to falling under OBSI’s purview and were fully aware the ombudsman would make the refusal public.

“But we were surprised by the title of the press release,” Phillips told It reads, “Armstrong & Quaile Refuses to Compensate Retired Complainants.”

Elliot suggests OBSI’s choice of words appears to depart from what he describes as the “fairly innocuous” and “objective” headlines the ombudsman has chosen for other firms’ refusals.

“When OBSI refers to Armstrong & Quaile as refusing to compensate ‘retired’ complainants, that to me is biased. And I’m not sure whether it’s in keeping with the spirit of [OBSI’s] terms of reference, which talk about fairness, impartiality, etc.”

OBSI’s February 11, 2014 headline for Equity Associates’ refusal reads: “Equity Associates Refuses to Pay $83,386 Compensation Recommendation.”

And more recently: “Richardson GMP Refuses to Compensate Multiple Investors.”

“ ‘Retired’ in the title implies bias, and is in fact inflammatory,” says Phillips.

Elliot notes Armstrong & Quaile is preparing a formal response to OBSI. “We’re copying the Ontario Securities Commission, the B.C. Securities Commission, MFDA and ACCP [Association of Canadian Compliance Professionals]. We understand other dealerships are complaining or at least expressing reservations about how they’re being treated [by OBSI].”

The letter will include a request to remove the word “retired” from OBSI’s headline.

Phillips says Armstrong & Quaile is consistent in following MFDA guidelines on suitability and leverage. “And we stand behind that belief.”


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