IIROC fines rep $15,000 over use of leveraged ETFs

By Staff | August 17, 2016 | Last updated on August 17, 2016
1 min read

Following a discipline hearing held on June 14, 2016, in Montréal, Québec, a hearing panel of the Investment Industry Regulatory Organization of Canada found that Christian Cloutier failed to take into consideration the recommended holding period and the risk level associated with the use of leveraged ETFs before recommending them as a suitable investment to one of his clients.

Specifically, the hearing panel found that Cloutier committed the following violation:

  • Between May 1, 2008 and November 30, 2011, Cloutier failed to exercise due diligence to ensure that his investment recommendations in leveraged ETFs constituted a suitable investment for one of his clients, contrary to IIROC Dealer Member Rule 1300.1 (a), (p) and (q) (Regulation 1300.1 (a), (p) and (q) of the IDA, prior to June 1, 2008).

The hearing panel imposed the following penalties on Cloutier:

  • A fine of $15,000;
  • In the event that Cloutier seeks re-registration with IIROC, he will be required to successfully complete the Conduct and Practices Handbook course within six months; and
  • Upon being re-registered with IIROC, Cloutier will be subject to strict supervision for six months, followed by close supervision for an additional six months.

The hearing panel also ordered Cloutier to pay costs in the amount of $5,000.

IIROC formally initiated the investigation into Cloutier’s conduct in November 2012. The misconduct occurred while Cloutier was a registered representative with National Bank Financial Inc., an IIROC-regulated firm. Cloutier is no longer a registrant with an IIROC‑regulated firm.

Read the hearing panel’s decision, dated July 13, 2016.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.