". Never forget that!
TheInvestment Industry Regulatory Organization of Canada -- thedisciplinary body for Canadian stockbrokers -- has taken action againsttwo Vancouver brokers accused of misconduct.
In a notice ofhearing, IIROC alleged that Marcel Rada, while working at WolvertonSecurities Ltd. in early 2007, persuaded two clients and one non-clientto lend $180,000 to Ialta Industries Ltd.
At the time, Ialta waslisted on the CNQ exchange, but subject to a cease-trade order forfailing to issue current financial statements.
The loans were to be repaid after the cease-trade order was lifted and the company's shares resumed trading.
IIROCalleged that Rada was "the primary beneficiary" of the money heraised. It noted that, during this period, $256,000 was deposited intoIalta's bank account, and $156,650 was paid out to Rada. Only oneinvestor recovered just $12,000.
IIROC said Mark Kaubane, Ialta'spresident at the time, said Rada was "driving" the company'sfundraising efforts, and was to receive 20-per-cent commission. He saidthat whenever Rada brought in money, he demanded immediate payment ofhis fees.
Rada denied he received any fees while working atWolverton. He claimed the $156,650 he received from Ialta was for workhe performed before joining the brokerage firm, but failed to producecopies of any invoices.
IIROC also alleged that, after moving toGlobal Securities Corp. in April 2007, Rada persuaded the samenon-client to invest $50,000 in Montrose Explorations Ltd., a privatecompany that planned to go into the mining business.
Once again,IIROC said Rada was the primary beneficiary of these funds. It notedthat, from May to November 2007, a total of $538,460 was deposited toMontrose's bank account, and $241,605 was disbursed to Rada. Theinvestor recovered just $5,000.
In addition to these allegedlyunauthorized transactions, IIROC alleges that Rada failed to cooperatewith investigators. In particular, he failed to provide personalbanking records and failed to show up for a scheduled interview inAugust.
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IIROC has permanently barred Bradley Trites, aformer broker at Canaccord Genuity Corp., for failing to cooperate withinvestigators.
The agency said it received complaints in 2008from four of Trites' clients, raising the possibility he had engaged inunauthorized trading, recommended unsuitable investments andmisrepresented the risks of certain investments.
In a letterdated Oct. 31, 2008, the agency informed Trites that it wasinvestigating his conduct. An interview was set for Nov. 6, 2008, butTrites cancelled the meeting and failed to respond to further requestsand demands.
An IIROC hearing panel, headed by Vancouver lawyerCatharine Esson, concluded that Trites' failure to cooperate wasintentional.
In addition to barring him from the brokerageindustry for life, the panel ordered him to pay a $25,000 fine and$4,500 in costs.
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Talk about mixed messages.
In aspeech to the Kelowna Rotary Club Tuesday, B.C. Securities Commissionexecutive director Paul Bourque said the drive for national securitiesregulation presents certain risks to our junior market.
Bourquesaid a national regulator is "going to have its hands full" dealingwith issues that affect the senior markets, such as new rules forover-the-counter derivatives trading, regulating credit ratingagencies, and "a host of other issues that have captured internationalattention in the wake of the 2008 market crash."
Bourque saidthat the risk is that a national regulator "will focus on these issuesto the detriment of paying attention to responsible regulation ofjunior markets," and existing expertise in regulating the juniormarkets "may be lost, or not heeded, in an organization mostly dealingwith new rule initiatives directed at senior markets."
I find itinteresting, and a bit disconcerting, that Bourque would air theseconcerns in public. The drive for national regulation -- which issupported by the B.C. government -- is running into quite enoughopposition from Alberta and Quebec without fomenting second thoughtshere at home.
Also, I have heard these sorts of concerns manytimes before and, frankly, I don't get it. B.C. does not have amonopoly on junior companies. Every province has them and, therefore,an interest in ensuring they are regulated responsibly.
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Readers may know that I have started blogging, which provides certain advantages to print journalism.
Oneof the big advantages is the ability to link readers to other Internetsites that bring more information and depth to the topic.
Intoday's blog, I provide links to listings for the sale of two housesbelonging to two West Vancouver promoters: Brent Pierce and GordonMuir.
Both deal in stocks that have a tendency to inflate, andthen deflate, but they are still able to afford very opulent digs, asyou can see by visiting my blog at www.vancouversun.com/baines
In future blogs, I will provide more links to the homes of local stock promoters.
You will see that penny stocks, even if they are losers, can pay big dividends for insiders.
dbaines@vancouversun.com