Canada’s investment industry regulator has banned B.C. mutual fund dealer Lorne Stuart Allison from conducting further securities-related business after a hearing panel determined he skirted rules to divert millions of dollars from the accounts of retirees to invest elsewhere.
The Canadian Investment Regulatory Organization (CIRO) also fined Allison $50,000 and ordered him to disgorge $19,846 in fees he took from the seniors.
Allison was registered in B.C. at Royal Mutual Funds Inc. and worked on Vancouver Island at the time of his misconduct in 2020 and 2021.
Allison recommended that retiree clients “JE, KE, and LC” open online brokerage accounts at financial institutions outside Royal Mutual Funds Inc. so he could execute trades in non-mutual fund securities on their behalf in exchange for fees, according to the panel’s ruling
'Placing them at risk'
In total, Allsion invested $2,751,391 for these clients.
Luckily, JE and KE did not lose any money. However, LC incurred a loss of $7,623 on the trades executed by Allison.
Allison resigned from the firm in February 2021 but carried on with unsanctioned investment transactions with two other clients.
“Assets valued at over $3,700,000 were transferred out of five client accounts at [Royal Mutual Funds Inc.], placing them at risk,” the panel stated.
“By charging clients fees for executing trades in their online brokerage accounts and accepting payments from them, raising potential conflicts of interest that were not disclosed to the Dealer Member, the Respondent [Allison] also committed serious misconduct,” the panel stated.
Allison must also pay $10,000 to CIRO for hearing costs.
