Connor Financial refuses to compensate investors

The Ombudsman for Banking Services and Investments (OBSI) today announced the refusal of Connor Financial Corporation to compensate multiple retail investors in the amounts of $93,030, $54,109, $189,878 and $250 as recommended by OBSI after investigating the merits of their complaints.

Connor Financial is a mutual fund dealer based in Victoria. The clients’ investment advisor, Mr. C, is the founder, president, and sole director, compliance officer, shareholder, and investment advisor of Connor Financial.

The first complainants, Mr. and Mrs. H, were a retired elderly couple who relied on their investments for income. Another complainant, Ms. B, was a 67-year-old semi-retired hairdresser. The third complainant, Ms. H (no relation to Mr. and Mrs. H), had Canada Pension Plan (CPP) disability payments as her only source of income. Connor Financial placed some or all of their portfolios in high-risk investments that were unsuitable given their personal and financial circumstances, investment objectives and/or risk tolerance.

Connor Financial is responsible for the unsuitable recommendations that led to the complainants’ unsuitable investment portfolios at the firm. It has chosen not to fulfill its responsibilities to them by providing the compensation they are owed based on the facts of the case.

OBSI’s recommended compensation amounts in these three complaints were arrived at by first calculating the difference between the amount the investors’ accounts should have been worth had they been suitably invested and the actual value as of the date they removed their investments from the investment dealer. Interest was then added to compensate the investors for the loss of use of their money, calculated from the date they first complained to the firm.

After discussion with securities regulators, OBSI established a one-time method of independent review of certain cases that were headed towards refusals to compensate. These three Connor Financial complaints were among them.

Firms were offered the opportunity to have former commissioners of the Ontario Securities Commission (OSC) provide an independent assessment of the files in question based on standards consistent with OBSI’s Terms of Reference.

If OBSI had unfairly considered the facts of the case or our investigation findings were objectively flawed, the reviewer would say so in their report on the matter. Connor Financial chose not to take up this offer.

In a fourth case the complainant, Ms. T, incurred tax penalties when Connor Financial inappropriately redeemed securities held in her RRSP to cover an investment loan. A settlement proposal of $250 was rejected by Connor Financial.

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