British Columbia Securities Commission

British Columbia Securities Commission

January 03, 2008 13:30 ET

British Columbia Securities Commission: Commission Upholds IDA Panel Ruling on Registrant's Suspension

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 3, 2008) - A British Columbia Securities Commission panel upheld a ruling by the Investment Dealers Association of Canada that resulted in a two-month suspension of a mutual fund salesperson.

On Nov. 27, 2007, a commission panel held a hearing to review an IDA panel's decision regarding the suspension of David Michael Michaels, a mutual fund salesperson who was working in Victoria, B.C. when he sold off-book shares to 13 of his clients.

During the IDA staff investigation, Michaels withheld information regarding the full number of clients who bought shares from him between August 1999 and February 2004. The IDA panel ruled his deception was not grounds for permanent suspension.

The IDA requested a review of the panel's decision, arguing that a two-month suspension was inadequate "to deter others from engaging in similar misconduct and improving the overall business standards in the securities industry." It said that standard "must be that there is zero tolerance for deception."

The commission panel disagreed. It said the IDA's guidelines and previous decisions do not support this position.

"They are cases involving serious misconduct, including deception, which then go on to impose an array of sanctions to address all of the misconduct, including significant suspensions," the commission panel said. "In our opinion, they do not support the proposition that any deception must necessarily invoke a permanent ban from the industry."

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the decision on our website www.bcsc.bc.ca by typing in the search box, David Michael Michaels or 2007 BCSECCOM 765. If you have questions, contact Ken Gracey, Media Relations, 604-899-6577.

Learn how to avoid investment fraud at the BCSC's investor education website: www.investright.org.

Contact Information

  • British Columbia Securities Commission
    Ken Gracey
    (604) 899-6577 or (B.C. & Alberta) 1-800-373-6393
    Website: www.bcsc.bc.ca