INVESTMENT DEALERS ASSOCIATION OF CANADA NOTICE OF HEARING

Transcription

1 INVESTMENT DEALERS ASSOCIATION OF CANADA IN THE MATTER OF: THE BY-LAWS OF THE INVESTMENT DEALERS ASSOCIATION OF CANADA AND JOHN D. W. BUSKELL NOTICE OF HEARING TAKE NOTICE that pursuant to Part 10 of By-law 20 of the Investment Dealers Association of Canada ( the Association ), a hearing will be held before a hearing panel ( the Hearing Panel ) on Tuesday, June 3, 2008, at the Calgary TELUS Convention Centre, th Avenue S.E., TELUS Room 106, Calgary, Alberta, at 10:00 a.m., or as soon thereafter as the hearing can be heard. TAKE FURTHER NOTICE that pursuant to Rule 6.2 of the Association Rules of Practice and Procedure, that the hearing shall be designated on the: X The Standard Track The Complex Track THE PURPOSE OF THE HEARING is to determine whether John D.W. Buskell ( the Respondent ) has committed the following contraventions that are alleged by the Association: COUNT 1 On or about February 12, 2007, to the present date, the Respondent, at all material times a Registered Representative with Wolverton Securities Ltd., failed to attend and give information in respect of an investigation conducted by the Association s Enforcement Department and/or failed to otherwise cooperate with the investigation contrary to Association By-law Buskell: Notice of Hearing 1

2 PARTICULARS TAKE FURTHER NOTICE that the following is a summary of the facts alleged and intended to be relied upon by the Association at the hearing: THE RESPONDENT 1. The Respondent was first employed in the securities industry in 1981 as an investment advisor with Bache Halsey Stuart Canada. Between , the Respondent held employment with approximately 30 different companies in either securities, real estate or banking positions. 2. The Respondent was employed with Wolverton Securities Ltd. ( Wolverton ) as an investment advisor and a registered representative in training as of July 12, 2004, and on February 25, 2005, the Respondent became a registered representative: Registration Issue Date Registration Termination Date Employer Registration Category 07/12/ /25/2005 Wolverton Securities Ltd. Not registered ( Investment Advisor In Training ) 02/25/ /07/2007 Wolverton Securities Ltd. Registered Representative (Retail) 3. The Respondent s employment was terminated by Wolverton effective February 7, The Respondent has not been registered with the Association since that date. 4. Pursuant to Association By-law 20.7(1), the Association retains jurisdiction over Approved Persons for a period of 5 years from the date on which the Approved Person ceased to be an Approved Person; in this case, February 7, THE INVESTIGATION 5. On or about January 25, 2007, Wolverton filed a ComSet notice with the Association in respect of the Respondent indicating a possible regulatory violation of inappropriate personal financial dealings with a client, E.F. 6. Wolverton later filed a Notice of Termination ( NOT ) with the Association in respect of the Respondent, effective February 7, 2007, indicating that the Respondent had been dismissed for cause and that there was an unresolved client complaint which alleged personal financial dealings. Buskell: Notice of Hearing 2

3 7. On February 19, 2007, Wolverton filed a further ComSet notice with the Association in respect of the Respondent indicating a possible regulatory violation of inappropriate personal financial dealings with a client, J.S. 8. On or about February 12, 2007, the Association s Case Assessment department sent a letter by regular post to the Respondent at the address listed for him ( the last known address ) on the National Registration Database ( NRD ). The letter advised the Respondent that the NOT filed by Wolverton indicates that the Respondent borrowed money from a client and has not repaid this debt. Although the Respondent was asked to provide the Association with a written response to this allegation on or before February 27, 2007, no response to this letter was received nor was the letter returned to the Association. 9. On or about July 31, 2007, the Association s Enforcement Staff ( Staff ) sent a letter via registered mail to the Respondent at the last known address advising him that Staff commenced an investigation into his conduct while he was a Registered Representative at Wolverton. Canada Post notified Staff that attempted delivery of this letter was made on Aug 8, Delivery was unsuccessful and a card was left at the address notifying the Respondent to pick up this letter at the post office. This letter was later returned to Staff unclaimed. 10. Staff were provided with Wolverton s internal investigation materials. Staff reviewed and analyzed these materials including, but not limited to, the written complaints of E.F. and J.S., and the notes of Wolverton s Calgary Branch Manager, B.P., describing interviews he had with the Respondent regarding E.F. s allegations and the events leading up to Wolverton s termination of the Respondent s employment. 11. B.P. s notes record that the Respondent admitted to B.P. and A.W., the Chief Compliance Officer for Wolverton, that the Respondent participated in outside business activities while employed as a Registered Representative at Wolverton and that he owed money to E.F. 12. Further, in the course of Staff s investigation, Staff discovered that the Respondent may have been involved in further and other outside business activities, inappropriate personal financial dealings, trading outside approved jurisdictions, unsuitable investment recommendations, excessive commissions/churning and theft or misrepresentation between Staff also noted that the Respondent was not completely forthcoming or cooperative with Wolverton or J.S. in regards to this matter. According to B.P. s notes from his second interview with the Respondent, the Respondent informed both A.W. and B.P. that he would be flying to Toronto to borrow funds from his father to repay E.F. However, A.W. advised that she saw the Respondent on her return flight to Vancouver at the time the Respondent said he would be on a flight to Toronto. Buskell: Notice of Hearing 3

4 14. B.P. further noted that, in early February 2007, the Respondent contacted B.P. indicating that he had just returned from Toronto and would attend the next day at the Calgary Wolverton office with a bank draft to repay E.F. However, the Respondent did not attend, nor did he contact B.P. again. 15. According to the J.S. complaint, the Respondent informed J.S. that he was retiring and therefore wanted to settle his debt to J.S. However, the Respondent did not attend at the meeting he arranged with J.S. in Edmonton, Alberta and J.S. discovered that the Respondent checked out of the hotel room at which he was staying in Edmonton on the day before their meeting. Subsequently, J.S. received voice messages from the Respondent in which the Respondent promised to repay J.S. or made excuses as to why payment would be late. J.S. was not repaid by the Respondent. 16. On or about August 23, 2007, Staff tried to contact the Respondent at the phone number listed for him on the NRD database, however the voic stated that it belonged to G.H., an individual not related to these matters insofar as known to the Association. Staff left a voice message asking for the Respondent to return their call or for the recipient of the voice message to notify Staff of an incorrect phone number. No response was received. 17. Staff discovered through an internet search that both the address and phone number on NRD listed for the Respondent is actually registered to G.H. Staff then contacted the Alberta Securities Commission (the ASC ) for any other contact information for the Respondent, but the ASC verified that the address on the NRD database was the same address depicted on the Respondent s Alberta Driver s License. However, the ASC provided Staff with a new phone number for the Respondent. 18. On or about September 11, 2007, Staff attempted to contact the Respondent at the telephone number provided by the ASC, however the voice mail was a female recording. Staff left a voice message asking for the Respondent to return their call or for the recipient of the voice message to notify Staff of an incorrect phone number. No response was received. 19. Staff scheduled an investigation interview for September 25, 2007, and sent a letter to the Respondent at the last known address by courier compelling his attendance at the investigation interview pursuant to Association By-law The courier later contacted Staff advising that the letter was undeliverable because the address is a postal box, not a physical address. 20. On or about September 18, 2007, Staff sent a second letter by regular post to the Respondent s last known address compelling the Respondent s attendance at an investigation interview now scheduled for October 4, 2007, to allow for mailing time. This letter was not returned to the Association nor was any response to the letter received. 21. The Respondent failed to attend at the interview scheduled for October 4, 2007 to answer questions in relation to the Association s investigation. Buskell: Notice of Hearing 4

5 22. On or about October 5, 2007, Staff sent the Respondent a letter by regular post to the last known address outlining their attempts to contact him, detailed in paragraphs 8 to 20 above. Staff also indicated in the letter that this matter was being referred to Enforcement Counsel. This letter was not returned to the Association, nor was any response received. 23. On or about January 11, 2008, A.W. contacted Staff indicating that the Respondent called Wolverton s Calgary office that day requesting his 2006 T4 slip. The Respondent was told that it was unavailable to which the Respondent replied he would call back at a later date. The telephone displayed that the Respondent had called from the River Rock Casino in Vancouver, British Columbia. 24. On or about March 2008, A.W. relayed to Staff that on or about January 15, 2008, the Respondent contacted Wolverton s Calgary office asking for a copy of his resume and his 2006 T4 slip. The Respondent was directed to contact Wolverton s Vancouver office. 25. The Respondent then contacted the payroll department of Wolverton s Vancouver office and provided a staff member with an address to mail his 2006 T4 slip to. The staff member recalls that it was a c/o address, but did not record the specifics. Further, the staff member reported asking the Respondent for his telephone number but he refused to provide it. 26. A.W. informed Staff that following January 15, 2008, the Respondent contacted Wolverton s Vancouver office several times over the next two weeks; however, the telephone number(s) from which the Respondent called from was not recorded. During the last telephone call the Respondent made to Wolverton, he was transferred to A.W. and the Respondent terminated the call before any conversation took place. 27. On or about March 7, 2008, A.W. confirmed to Staff that the Respondent had not contacted Wolverton since late January On or about March 7, 2008, Staff conducted another internet search for the Respondent s address and/or telephone number. Staff found a telephone number for a similar name to the Respondent s in Abbottsford, British Columbia. Although the middle initial did not correspond to the Respondent s, Staff tried to contact the Respondent at this telephone number. Staff left a voice message asking for the Respondent to return their call or for the recipient of the voice message to notify Staff of an incorrect phone number. No response was received. 29. Staff have concluded that the Respondent failed to attend and give information in respect of an investigation being conducted by the Association s Enforcement Department, thereby contravening Association By-law Buskell: Notice of Hearing 5

6 GENERAL PROCEDURAL MATTERS TAKE FURTHER NOTICE that the hearing and related proceedings shall be subject to the Association s Rules of Practice and Procedure. TAKE FURTHER NOTICE that pursuant to Rule 13.1, the Respondent is entitled to attend and be heard, be represented by counsel or an agent, call, examine and cross-examine witnesses, and make submissions to the Hearing Panel at the hearing. RESPONSE TO NOTICE OF HEARING TAKE FURTHER NOTICE that the Respondent must serve upon the Association a Response to the Notice of Hearing in accordance with Rule 7 within twenty (20) days (for a Standard Track disciplinary proceeding) or within thirty (30) days (for a Complex Track disciplinary proceeding) from the effective date of service of the Notice of Hearing. FAILURE TO RESPOND OR ATTEND HEARING TAKE FURTHER NOTICE that if the Respondent fails to serve a Response or attend the hearing, the Hearing Panel may, pursuant to Rules 7.2 and 13.5: (a) (b) (c) proceed with the hearing as set out in the Notice of Hearing, without further notice to the Respondent; accept as proven the facts and contraventions alleged by the Association in the Notice of Hearing; and order penalties and costs against the Respondent pursuant to By-law 20.33, and PENALTIES & COSTS TAKE FURTHER NOTICE that if the Hearing Panel concludes that the Respondent did commit any or all of the contraventions alleged by the Association in the Notice of Hearing, the Hearing Panel may, pursuant to By-law and By-law 20.34, impose any one or more of the following penalties: Where the Respondent is/was an Approved Person: (a) (b) a reprimand; a fine not exceeding the greater of: (i) $1,000,000 per contravention; and Buskell: Notice of Hearing 6

7 (ii) an amount equal to three times the profit made or loss avoided by such Approved Person by reason of the contravention. (c) (d) (e) (f) (g) (h) (i) suspension of approval for any period of time and upon any conditions or terms; terms and conditions of continued approval; prohibition of approval in any capacity for any period of time; termination of the rights and privileges of approval; revocation of approval; a permanent bar from approval with the Association; or any other fit remedy or penalty. Where the Respondent is/was a Member firm: (a) (b) a reprimand; a fine not exceeding the greater of: (i) $5,000,000 per contravention; and (ii) an amount equal to three times the profit made or loss avoided by the Member by reason of the contravention; (c) (d) (e) (f) (g) suspension of the rights and privileges of the Member (and such suspension may include a direction to the Member to cease dealing with the public) for any period of time and upon any conditions or terms; terms and conditions of continued Membership; termination of the rights and privileges of Membership; expulsion of the Member from membership in the Association; or any other fit remedy or penalty. Buskell: Notice of Hearing 7

8 TAKE FURTHER NOTICE that if the Hearing Panel concludes that the Respondent did commit any or all of the contraventions alleged by the Association in the Notice of Hearing, the Hearing Panel may pursuant to By-law assess and order any investigation and prosecution costs determined to appropriate and reasonable in the circumstances. DATED at Calgary, this 16 th day of April, Warren Funt Vice President, Western Canada Investment Dealers Association of Canada Suite 1325, 650 West Georgia Street Vancouver, BC V6B 4N9 Buskell: Notice of Hearing 8