Suitability lapse costs $23,000

By Staff | August 5, 2011 | Last updated on August 5, 2011
1 min read

A hearing panel of the Investment Industry Regulatory Organization of Canada (IIROC) has accepted a settlement agreement, with sanctions, between IIROC staff and Radoslaw Andrzej Chrabalowski.

In this agreement, Chrabalowski admits that he failed to meet his suitability obligations when he recommended an investment product for two elderly clients which was not suitable given their investment knowledge, risk tolerance and investment objectives.

Chrabalowski’s penalty consists of:

  • A $20,000 fine;
  • A $522 disgorgement of commission; and
  • $2,500 in costs.

Specifically, Chrablowski admits that he failed to use due diligence to ensure that an investment recommendation was suitable for his clients, contrary to IDA By-law 1300.1(q) (now IIROC Rule 1300.1(q)). Although the clients wanted an investment which would generate some monthly income, Chrablowski recommended a principal-protected note which only paid a return at the end of its 15-year term.

The violation occurred between October and December 2007, while Chrabalowski was a registered representative with the Mississauga, ON branch of Raymond James Ltd., an IIROC-regulated firm. IIROC began the investigation into Chrabalowski’s conduct in April 2009. He is currently a registered representative with the Markham, ON branch of Argosy Securities Inc., an IIROC-regulated firm. staff


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