Explanatory tables
These explanatory tables detail the offence committed by an advisor.
Conflict of interest
Conflict of interest
Case 1:
| Charge(s) | The disciplinary complaint filed against the representative includes only one count. It is alleged that she placed herself in a conflict of interest by borrowing $5,000 from a client. |
| Professional(s) obligation(s) referred to in this decision | The relationship established between a client and his representative is based on trust. The representative must not take advantage of this special relationship to use it for his own benefit. In performing the tasks his client assigns him, he must make decisions and recommendations objectively and independently, with no regard to his own personal gain. More: InfoDéonto |
| Outcome | The representative admitted her guilt. She was struck for one month. |
| Reasons(aggravating or mitigating factors considered in imposing the penalty) |
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| Consult the full decision | The full text of the decision on conviction and on penalty can be found here. |
Case 2:
| Charge(s) | The disciplinary complaint filed against the financial security advisor and representative of the mutual funds broker includes 6 counts. Four counts alleging that he placed himself in a real or potential conflict of interest:
One count alleging that he made a false or misleading sworn statement in a judicial proceeding (count 5) One count alleging that he made false or misleading statements in an investigation concerning him by the syndic (count 6) |
| Professional(s) obligation(s) referred to in this decision | The representative must always keep in mind and never forget that all of his actions as a representative must be in the client’s best interests. More: InfoDéonto |
| Outcome | The advisor and representative pleaded guilty. He had developed a special relationship with his clients that went well beyond the usual professional relationship. He invested a great deal in them, in spite of his ethical obligations. In the context of that relationship, he had access to privileged information and found himself at the center of domestic and family disputes that he tried to settle. His role exceeded that of a financial planner. A 2-week suspension from practise was imposed for count 3. Fines totalling $6,000 were imposed for the three other counts alleging that he had placed himself in a conflict of interest (counts 1, 2, and 4). During his intervention in the judicial file that opposed members of his clients’ family, he claimed under oath that he was never aware of the mandate given by his client and that he did not take part in its signature or preparation, but this statement was false. A $4,000 fine was imposed for count 5. All of his false statements hindered the work of the syndic of the Chambre de la sécurité financière in the search for the truth and the mission of protecting the public. A 1-month removal from the roll was imposed for count 6. It was ordered that the two temporary removal periods be served consecutively. |
| Reasons(aggravating or mitigating factors considered in imposing the penalty) |
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| Consult the full decision | The full text of the decision on conviction and on penalty can be found here. |
Case 3:
| Charge(s) | The disciplinary complaint filed against the financial security advisor and representative of the mutual funds broker includes 13 counts. The first 12 counts allege that he failed to put his client’s interests before his own personal interests:
One count alleging that he failed to act with competence and to respect the limits of his understanding by proposing leveraging strategies to his clients. |
| Professional(s) obligation(s) referred to in this decision | The representative must make sure that using leveraging is in the client’s best interests based on his personal and financial situation, his investment objectives, his risk tolerance, and his understanding of financial markets. He must also put his client’s interests before his own personal interests and warn him if he requests a transaction that goes against his interests. More: InfoDéonto |
| Outcome | The advisor and representative was convicted of every count in the complaint. He did not put his clients’ interests before his own personal interests by replacing several leveraged loans and by closing and opening investment accounts, resulting in redemption fees for the clients and a commission for himself. 18-month periods of removal from the roll were imposed on each of the first 12 counts. He acted incompetently and recklessly by implementing a strategy he did not sufficiently understand. A 1-month removal from the roll was imposed for count 13. It was ordered that these temporary removal periods be served concurrently. |
| Reasons(aggravating or mitigating factors considered in imposing the penalty) |
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| Consult the full decision | The full text of the decision on conviction and on penalty can be found here. |
Financial needs analysis and investor profile
Financial needs analysis and investor profile
| Charge(s) | The disciplinary complaint filed against the financial security advisor includes six counts.
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| Professional(s) obligation(s) referred to in this decision | The financial needs analysis, commonly called the “FNA,” is an essential process that the financial security advisor must complete to properly advise their client and cover their insurance needs. More: Info-Déonto See also: |
| Outcome | Convicted on all six charges. The client’s refusal to provide the information required for the needs analysis does not exempt the advisor from his ethical duties. |
| Reasons(aggravating or mitigating factors considered in imposing the penalty) | The decision on the penalty has not yet been rendered. |
| Consult the full decision | The full text of the decision on conviction and on penalty can be found here. The full text of the decision on penalty here. |
Lack of integrity and appropriation of funds
Lack of integrity and appropriation of funds
| Charge(s) | The disciplinary complaint filed against the mutual fund dealer representative includes two counts.
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| Professional(s) obligation(s) referred to in this decision | The proper operation of the financial markets requires consumer confidence in those markets. That confidence, in turn, depends largely on the integrity of financial market professionals. It is therefore crucial to show consumers that they can have confidence in the financial markets because there exist rigorous standards of practise that are applied and respected by industry members. More: InfoDéonto |
| Outcome | Convicted on both counts. |
| Reasons(aggravating or mitigating factors considered in imposing the penalty) | The decision on the penalty has not yet been rendered. |
| Consult the full decision | The full text of the decision on conviction and on penalty can be found here. The full text of the decision on penalty can be found here. |
Duty to act with professional integrity
Duty to act with professional integrity
Case 1:
| Charge(s) | The clients referred to in this complaint include the spouse and two young children of a car accident victim, who received benefits from the Société de l’assurance automobile du Québec after his death. The disciplinary complaint filed against the financial security advisor and group annuity and insurance advisor includes four counts.
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| Professional(s) obligation(s) referred to in this decision | Having a limited transaction authorization does not entitle the representative to perform discretionary transactions. Each transaction must be preapproved by the client. The representative must document the trades made pursuant to this authorization, in particular by noting the time, date, person who performed the transaction, the means of communication and content of the conversation. More: InfoDéonto |
| Outcome | The advisor was convicted on counts 3 and 4 and acquitted of the first two counts in the complaint. As to count 3, the purpose of the limited authorization letter is not to allow a representative to perform discretionary transactions. The advisor may not claim that he is dispensed from having to obtain the client’s preauthorization just because the financial institution does not ask the representative to produce it before performing the requested trade. This obligation is still incumbent upon him. The advisor failed to act with professional integrity and competence within the meaning of section 16 of the Act respecting the distribution of financial products and services and practised his activities negligently within the meaning of section 35 of the Code of Ethics of the Chambre de la sécurité financière. It was not proved, however, that he lacked integrity. A fine of $4,000 was imposed on the advisor for this count. As to count 4, it was proved that the advisor signed as a witness to the signature of the client even before the documents in question had been signed. This action shows a lack of professional integrity, but not a lack of honesty or loyalty, given that it appears that the action was done for the purpose of efficiency and not to mislead the consumer. A fine of $2,000 was imposed on the advisor for this count. |
| Reasons(aggravating or mitigating factors considered in imposing the penalty) |
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| Consult the full decision | The full text of the decision on conviction can be found here. The full text of the decision on penalty can be found here. |
Case 2:
| Charge(s) | The disciplinary complaint filed against the financial security advisor and mutual fund dealer representative contained five counts related to her conduct while selling an individual term life insurance proposal.
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| Professional(s) obligation(s) referred to in this decision | The disciplinary process and rules of ethics are meant to promote proper conduct and exemplary conduct. Thus, acting with integrity, loyalty and competence and in the interests of the client, understanding the products being offered, and offering advice and products that suit a client’s situation are ethical obligations that are not satisfied by merely filling out all the required forms. More: InfoDéonto See also: |
| Outcome | The representative pleaded guilty to all 5 counts. A $5,000 fine was imposed for count 1. The financial needs analysis, commonly called a “FNA,” is a fundamental document used to determine the clients’ needs and serves as the basis for the representative’s recommendations. Fines totalling $5,000 were imposed for counts 2 and 3. A correctly completed replacement notice allows clients to make an informed decision in their interest. A $5,000 fine was imposed for count 4. Failure to communicate accurate medical information is a serious breach because the consumer risks losing coverage and it also undermines the relationship of trust between the insurer and the representative. She was temporarily removed for 1 month for count 6. The representative acted negligently by signing a letter to cancel existing insurance policies for and on behalf of her clients, even with their verbal consent. This authorization must be by way of a written power of attorney. |
| Reasons(aggravating or mitigating factors considered in imposing the penalty) |
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| Consult the full decision | The full text of the decision on conviction and on penalty can be found here. |
Poorly performed mandate
Poorly performed mandate
Case 1:
| Charge(s) | The disciplinary complaint filed against the financial security advisor and group insurance plans advisor contained 1 count. He was accused of being negligent by failing to communicate and follow up with the client after receiving a “notice of lapse” concerning an insurance policy. |
| Professional(s) obligation(s) referred to in this decision | Representatives governed by the CSF have ethical duties and obligations toward their clients. These duties and obligations dictate the conduct to maintain in relationships with clients. In the practice of their profession, representatives must:
For more information: InfoDéonto. |
| Outcome | The advisor pleaded guilty. He was temporarily removed for 30 days. |
| Reasons(aggravating or mitigating factors considered in imposing the penalty) |
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| Consult the full decision | The full text of the decision on conviction and on penalty can be found here. |
Case 2:
| Charge(s) | Two disciplinary complaints were filed against two financial security advisors (a representative and her sales director) Each complaint included three counts. Both are alleged to have failed to act with competence and professionalism by seeking to put a stop payment on a life insurance policy, thereby creating or risking an insurance overdraft (count 1 for one advisor and count 3 for the other one). Moreover, with respect to the first advisor:
With respect to the second advisor:
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| Professional(s) obligation(s) referred to in this decision | Advisors must always act in the best interests of the client. They must also act with honesty and loyalty. For more information: InfoDéonto. |
| Outcome | The advisor admitted his guilt on all counts of the complaint against him. He was fined a total of $5,500 and struck off the roll for two months. The advisor was convicted on all counts of the complaint against her. She was fined a total of $4,000 and received a reprimand. |
| Reasons(aggravating or mitigating factors considered in imposing the penalty) |
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| Consult the full decision | The full text of the decision on conviction can be found here. The full text of the decision on penalty can be found here. |
Duty of confidentiality
Duty of confidentiality
| Charge(s) | The disciplinary complaint filed against the respondent financial security advisor included six counts:
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| Professional(s) obligation(s) referred to in this decision | Representatives governed by the Chambre de la sécurité financière have ethical duties and obligations toward their clients, which dictate their proper conduct in relationships with clients. In the practice of their profession, representatives must:
More: InfoDéonto |
| Outcome | The provisional striking off the roll of the financial security advisor was ordered while awaiting the decision on guilt, primarily because of the multiplicity of the derogatory acts committed during a period of almost four months and the risk to the protection of the public. Convicted on all six counts.
He was permanently struck from the roll on the first five counts. A 12-month striking off the roll was imposed for count 6 (hindering). It was ordered that the periods when he was struck off be served concurrently. |
| Reasons(aggravating or mitigating factors considered in imposing the penalty) |
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| Consult the full decision | The full text of the decision on the provisional striking off the roll here. The full text of the decision on conviction can be found here. The full text of the decision on penalty can be found here. |
Incomplete, inaccurate, or misleading information
Incomplete, inaccurate, or misleading information
| Charge(s) | Two disciplinary complaints involving a single consumer were filed against two financial security advisors and financial planners. It was alleged, on the first count of each complaint, that they sent false, incomplete, or inaccurate information concerning the management fees applicable to investments held with an investment management firm. One of the advisors and planners was also the subject of a second count alleging that he failed to act professionally and with moderation by denigrating the representative of his client, lying about him, and putting undue pressure on his client to transfer the management of his investments. |
| Professional(s) obligation(s) referred to in this decision | Representatives governed by the Chambre de la sécurité financière have ethical duties and obligations toward their clients, which dictate the proper conduct in relationships with clients. In the practice of their profession, representatives must:
More: InfoDéonto |
| Outcome | Convictions on every count in the two complaints. The advisors and planners did not commit a mere error. It is so serious that it constitutes an ethical offence. While the error may have initially been made in good faith, the manner in which events unfolded reveals that the advisors and planners engaged in conduct that was not only reckless, but negligent, to the point of wilful blindness. The advisor and planner named in the complaint with two counts was struck off the roll for 45 days (count 1) and 30 days (count 2). It was ordered that these periods of provisional striking off be served concurrently. A period of striking off the rolls of 30 days was imposed on the advisor, planner, and mutual fund dealer representative named in only one count. |
| Reasons(aggravating or mitigating factors considered in imposing the penalty) |
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| Consult the full decision | The full text of the decision on conviction can be found here. The full text of the decision on penalty can be found here. |
Replacement notice
Replacement notice
| Charge(s) | The disciplinary complaint filed against the financial security advisor and mutual fund dealer representative included four counts.
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| Professional(s) obligation(s) referred to in this decision | Representatives must endeavour to ensure that all personal insurance contracts are maintained in effect, unless the replacement is in the client's interest. It is only when the representative can demonstrate that the replacement is actually in the client's interest that the representative may replace it. More: InfoDéonto |
| Outcome | The advisor and representative admitted his guilt on the four counts of the complaint. Fines totalling $4,000 under counts 1 and 6 and reprimands under counts 2 and 3 were imposed. |
| Reasons(aggravating or mitigating factors considered in imposing the penalty) |
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| Consult the full decision | The full text of the decision on conviction and penalty can be found here. |
