IIROC announces settlement with Jean-Guy Ducharme

A Hearing Panel of the Investment Industry Regulatory Organization of Canada (IIROC) has accepted a Settlement Agreement between IIROC staff and Jean-Guy Ducharme.

In the agreement, Mr. Ducharme admits to making over-the-counter transactions for his personal account without informing his firm. He also admits to failing to ensure that certain investment recommendations were suitable to the clients’ investment objectives and risk tolerance. As part of the agreement dated November 19, 2010, Mr. Ducharme agrees to a $15,000 fine.

Specifically, Mr. Ducharme admits to:

• engaging in conduct unbecoming or detrimental to the public interest by purchasing shares in two different public companies for his own personal account without disclosing the proposed trades to his firm, contrary to IIROC Rule 29.1;
• failing to ensure that investment recommendations made to two clients were consistent with the clients’ investment objectives and risk tolerance, contrary to IIROC Rules 29.1, 1300.1(a) and 1300.1(p);
• making investment recommendations where he and other representatives at his branch held shares from those companies in their personal accounts, and he was or should have been aware that one of those representatives had a privileged connection with insiders of those companies, who were also clients of his firm. The panel found this conduct unbecoming or detrimental to the public interest, contrary to IIROC Rule 29.1.

The violations occurred between 2004 and 2006 while Mr. Ducharme was a Registered Representative at the Brossard Branch of Desjardins Securities Inc., an IIROC-regulated firm. IIROC began the investigation into Mr. Ducharme’s conduct on March 25, 2008. Mr. Ducharme is no longer registered with an IIROC-regulated firm.

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.

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.

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