IIROC settles with Paul Ryan Klemke

By Staff | January 17, 2011 | Last updated on January 17, 2011
2 min read

A hearing panel of the Investment Industry Regulatory Organization of Canada (IIROC) has accepted a settlement agreement between IIROC staff and Paul Ryan Klemke.

In the agreement, Mr. Klemke admitted to unauthorized trading in client accounts; violating his know-your-client and suitability obligations in certain trading in client accounts; and trading in a security that was not eligible for distribution.

Mr. Klemke has agreed to pay a $35,000 fine and $5,000 in costs. He has also agreed to being prohibited from reapplying for registration with IIROC until December 15, 2011. As conditions of re-approval in any category, Mr. Klemke will be required to successfully complete the Conduct and Practices Handbook examination and be subject to a one-year period of strict supervision.

Specifically, Mr. Klemke admitted to engaging in conduct unbecoming and detrimental to the public interest, contrary to IIROC Rule 29.1, by:

  • Making discretionary purchases of a single security in 42 separate client accounts without their knowledge, and/or consent and/or authorization;
  • Engaging in unauthorized trading by redeeming mutual funds in client accounts without the clients’ knowledge and/or consent and/or prior authorization, in order to fund the above purchases; and
  • Selling and/or attempting to sell a security to residents of Saskatchewan when it was not eligible for distribution in that province.

IIROC began investigation into Mr. Klemke’s conduct on May 15, 2008. The violations occurred in March and/or April 2008, when Mr. Klemke was a registered representative with a Calgary branch of Jennings Capital Inc., an IIROC-regulated firm. Mr. Klemke is no longer registered with an IIROC-regulated firm.

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