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					A/Sgt. C.R. (Christopher) Pittman,                          04 September 2007
Montréal IMET/ ÉIPMF
Place Victoria, Tour de la Bourse
800, Place Victoria, bureau 1610
Casier postal 244
Montréal (Québec)
H4Z 1E8


Dear Sgt. Christopher Pittman (Chris),

                              Re: Markarian v. CIBC

Thank you for your call on August 29, 2007 with respect to the Markarian c. Marchés
mondiaux CIBC inc. [2006] QCCS 3314 decision (“Decision”) rendered in Montreal on
June 14, 2006.1


As per our discussion, both l'Autorité des marchés financiers (AMF) and the
Investment Dealers Association of Canada (IDA) have failed in bringing this matter
to the attention of the RCMP or the local police force.   Furthermore, the IDA has
taken the position that it was not aware of the case even after it had permanently
prohibited Migirdic from approval in any capacity with a Member of the Association
on 14 June 2004 and further fined him $305,000 and ordered payment of $55,000 in
costs.   Please see letter from James MacDonald to Paul Bourque, Senior Vice-
President, Member Regulation, IDA dated August 24, 2007.2


The Decision rendered by Justice Senécal evidences that CIBC World Markets Inc., a
member firm of the IDA3 and Thomas Monahan, the President of CIBC World
Markets, a registrant under the Quebec Securities Act, were aware of the fraud.


Below are translated extractions from the Decision;


     [160] Uncomfortable with what he had done and unable to bear the
     pressure any longer, Migirdic was absent from work for a week in
     February and decided to admit his fraud. He contacted the president of
     CIBC Wood Gundy, Tom Monahan, on February 26, 2001 to inform him
     that there were certain "problems" with the accounts of certain clients.
     Monahan asked him to put that down in writing and to send it to
     Noonan. An email followed immediately in which Migirdic indicated the
     accounts and the problems. Migirdic mentioned in the e-mail that the
     Markarians were completely unaware that they had guaranteed the
     accounts of Luthi and Gazarosyan…




                                     Page 1 of 5
     [179] Two and half years later, i.e. on April 16, 2004, the Investment
     Dealers Association of Canada (the IDA) found Migirdic guilty of 24
     counts, including 11 related to the present case, and excluded him for
     life from working as a securities representative in Canada, in addition to
     ordering him to pay $305 000 in fines (which he never paid). However,
     no criminal charges were ever laid against him. Moreover, there was
     never any complaint or sanction against CIBC.

     [213] The Court shares the opinion in the IDA'S decision: letting a
     gullible client believe that a signature on a blank document is a mere
     formality related to his or her record, then using it in another file for
     completely different purposes constitutes forgery of a signature (at para.
     30 of the decision) and fraud (at para. 10), which is a crime (at para.
     40).4

     [558] The Markarians were, profoundly affected by Migirdic's fraud, for
     which ClBC is responsible….

     [614] Daniel Bowering, Compliance Department officer, was mandated
     by ClBC to investigate Migirdic's fraud and he testified. He wrote to his
     bosses at the end of his investigation that the firm should probably
     absorb the Markarians' losses, given all the irregularities committed by
     Migirdic, Migirdic's statements, the Markarians' statements and all the
     information revealed in Bowering's investigation.             Bowering's
     recommendation was not followed.

     [615] So why was everything blocked? Why were the false guarantees
     exercised? Why did ClBC seize the Markarians' assets?

     [616] Because Tom Monahan, the president of ClBC Wood Gundy,
     decided that was what to do.

     [638] CIBC thus became the accomplice in Migirdic's fraud and did
     everything in its power to benefit from it directly.



Thomas Monahan was also on the Board of Directors of the IDA from June 2003 to
June 2005.5    The IDA decision, in dealing with Migirdic, makes no reference to
Thomas Monahan’s complicity in fraud as does Justice Senécal. Is the enforcement
arm of the IDA influenced by the Board of Directors or the Executive Committee?


The fact that the IDA is one of the RCMP IMET “partners” and assists the RCMP in
filtering which cases should be forwarded to IMET for consideration needs to be
seriously re-addressed. As per my phone call, I do not wish the RCMP to share the
information that I provide to you, with the IDA. In my opinion any IDA participation
can only serve to vitiate the RCMP IMET’s efforts.




                                      Page 2 of 5
Furthermore employees/directors of the IDA, unlike you, have taken no oath of
office. They are not a statutory body and as such have no legislative mandate to
protect the public.


The following is an excerpt from l’Autorité des marchés financier’s web site located at
                                             6
http://www.lautorite.qc.ca/index.en.html          found under the heading “Register of
Firms and Individuals authorized to practice”, downloaded on Friday, August 31,
2007:


    Name                  Position                Status                    Firm
MONAHAN,         PRESIDENT                       APPROVED   CIBC INVESTOR SERVICES INC.
THOMAS STEPHEN   (PRESIDENT)
                 OFFICER / OTHER                 APPROVED   CIBC WORLD MARKETS INC.
                 (OFFICER / OTHER)
                 DIRECTOR                        APPROVED   CIBC TRUST CORPORATION
                 (DIRECTOR)
                 CHAIRMAN OF THE BOARD           APPROVED   CIBC INVESTOR SERVICES INC.
                 (CHAIRMAN OF THE BOARD)
                 DIRECTOR                        APPROVED   CIBC WORLD MARKETS INC.
                 (DIRECTOR)
                 CHIEF FINANCIAL OFFICER         APPROVED   CIBC INVESTOR SERVICES INC.
                 (CHIEF FINANCIAL OFFICER)
                 DIRECTOR                        APPROVED   CIBC PRIVATE INVESTMENT COUNSEL INC.
                 (DIRECTOR)
                 DIRECTOR                        APPROVED   CIBC INVESTOR SERVICES INC.
                 (DIRECTOR)




According to [para 160], of the Decision (see above) Mr. Monahan became informed
of Migirdic’s fraud on or about February 26, 2001. Within 6 weeks, on or about April
5, 2001, CIBC World Markets terminated Migirdic’s employment.              This was shortly
after Mr. Monahan accepted the appointment as Chair of the Retail Sales Committee
of the IDA.7


The Mandate of the IDA Retail Sales Committee is:


     ... to provide Members and/or the Board with . . . recommendations on
     education and training proficiency standards (to raise the competence of
     Members and their Approved Persons, resulting in higher industry
     standards which are in the public interest). . . 7



It would appear that this private association of investment dealers has its own view
of what constitutes “public interest”. I would venture that the retail investing public
has a much different view – more in line with Judge Senécal’s.




                                        Page 3 of 5
The following is an extract from the IDA Notice of Hearing and Particulars dated 19
April 2004.8


     137. Upon CIBC’s refusal to accept the forged power of attorney, the
     Respondent flew to London, England to obtain the signature of the
     beneficial owner of the account of Y. Ltd. on the power of attorney;


Did the IDA or CIBC World Markets, or both, have a duty to report this to the proper
law enforcement authorities? Are they not both complicit by not reporting?


Judge Senécal has addressed the matter of CIBC’s guilt within the framework of a
civil action. Criminal fraud is not totally different albeit the standard of proof may be
somewhat higher.


The following is an extract from an article entitled “Broker broke promise, court told”
in the Montreal Gazette dated 20 January 2005 authored by Paul DeLean.


     Not even a letter sent to CIBC president John Hunkin, to which was
     attached a letter signed by Migirdic admitting his misdeeds, was enough
     to block the seizure, Papazian said.9



It would appear that Thomas Monahan was not the only executive in the know.


On Thursday, August 30th Me. Nathalie Drouin, Executive Director, Enforcement and
Legal Affairs at the AMF returned my call.      Me. Drouin initially said she was not
familiar with the Markarian v. CIBC decision. As I continued to explain what the case
was about, Me. Drouin acknowledged that she was very familiar with the case but
that those within the enforcement department commonly referred to this as the
“CIBC case”.   I asked her why the AMF had not contacted the RCMP IMET or any
other law enforcement body. She responded in a defensive fashion stating that the
AMF would neither deny nor confirm that any file had been opened on this matter but
she would not directly answer my question. I reminded her that this case had been
active for a very long time, since the 1990’s, and in fact that the IDA had barred
Migirdic from the industry back in 2004 and yet it would appear that neither had
reported CIBC or Monahan.




                                       Page 4 of 5
I then read Me. Drouin a few of the paragraphs from the Decision.          Me. Drouin
acknowledged that Justice Senacal’s words raised serious concerns. I suggested that
she contact the police since this matter involved fraud.       Our conversation was
concluded.


Why hadn’t either the IDA or the AMF reported Migirdic to the RCMP? Why are there,
at minimum, 45 other decisions posted on the IDA’s website that involve forgery and
other offences constituting fraud, (the majority of the plaintiff’s having pleaded
guilty), that the RCMP have no knowledge of?        Should the AMF be performing the
oversight of the IDA or should it be by a third party reporting to the legislative?
What justice is there for the other victims, as per the Decision, of CIBC and Tom
Monahan’s fraudulent acts?


CIBC refused to provide “with respect to the communication of Mr. Migirdic's past
compliance, disciplinary, credit and regulatory files” as found in Papazian c. Marchés
mondiaux CIBC inc. [2003] J.Q. no 12759 para. 26.10


     2.     For confidentiality and privacy reasons, we will hide the clients'
            names and account numbers in each file;


It would appear that there are several others which may have suffered a similar fate
to that of the Markarians.


Will the RCMP open a file and investigate this matter?        I look forward to your
response.


Best wishes,




Robert Kyle
InvestorVoice.ca
60 Pleasant Blvd. #2501
Toronto, Ontario
M4T 1K1

Home: 416-925-6230
Cell: 647-868-6230



                                      Page 5 of 5
               COMITÉ DU CONSEIL DE SECTION

CANADA
PROVINCE DE QUÉBEC



Date : 16 avril 2004
______________________________________________________________________

PRÉSIDENT :         Me Jean-Pierre Lussier
______________________________________________________________________



ASSOCIATION CANADIENNE DES COURTIERS EN VALEURS MOBILIÈRES,

      Ci-après appelée « l’Association »

                          Et

HARRY MIGIRDIC,

      Ci-après appelé « l’intimé »



______________________________________________________________________

                                     DÉCISION
______________________________________________________________________




[1]    Le 19 janvier 2004, l’Association signait un avis d’audience adressé à l’intimé
afin qu’il comparaisse devant le Comité du conseil de section pour y répondre de 24
chefs d’infraction.
                                                                                   PAGE : 2

      1.      LES PRÉLIMINAIRES
[2]     L’intimé a effectivement comparu à la date prévue à cet avis d’audience, soit le 4
février 2004. Il n’avait cependant pas signifié par écrit une réponse aux allégations de
l’avis d’audience dans le délai prévu aux statuts de l’Association.

[3]      Au lieu de tenir pour avérés les faits allégués et les conclusions de l’Association,
comme l’autorise l’article 15 du Statut 20, vu leur gravité et la déclaration de l’intimé à
l’effet qu’il était représenté par avocat, le Comité a choisi de remettre l’audience au 18
mars 2004 et de permettre à son avocat de produire, le cas échéant, une contestation
écrite des allégations et conclusions de l’Association.

[4]   Le 16 février 2004, l’intimé a produit une contestation écrite de tous et chacun
des chefs d’infraction par l’entremise de son procureur, Me Franco Iezzoni.

      2.      LA PREUVE
[5]     Lors de l’audience du 18 mars 2004, l’intimé et son procureur étaient présents.
L’intimé a d’abord procédé au dépôt d’un document à l’effet qu’il admettait le contenu
de chacun des paragraphes 1 à 138 des détails au soutien de tous les chefs
d’infraction. Par la suite, il déposait un second document par lequel il retirait à Me
Iezzoni le mandat de le représenter. Il ajoutait qu’il désirait se représenter lui-même,
sans avocat.

[6]        Vu l’admission générale des faits allégués, l’Association déclara sa preuve close.

[7]    Interrogé par le président du Comité sur la question de savoir si son admission
des allégations à l’appui des chefs d’infraction constituait pour lui un plaidoyer de
culpabilité, l’intimé répondit négativement et manifesta son intention de témoigner.

[8]     Dans son témoignage, il mentionna que toutes les transactions faites pour ses
clients, l’avaient été avec leur plein consentement. Ceux-ci, rapporte-t-il, lui avaient
donné mandat de faire fructifier leurs comptes depuis plusieurs années et ce n’est
qu’avec l’effondrement des marchés qu’ils se plaignirent de sa gestion de leurs
comptes.

[9]     Contre-interrogé par exemple à l’égard de sa cliente J.P., il reconnaît tous les
détails contenus aux paragraphes 16 à 22 et il ignore le paragraphe 23. Cette cliente
voulait qu’elle puisse disposer d’une somme mensuelle fixe et lui laissait latitude pour le
reste.

[10] Il admet aussi avoir fait signer en blanc des formules de garanties d’une autre
cliente (R.L.) par un client (H.M.) qui ne connaissait pas R.L. Ce client, signataire de la
garantie, lui faisait confiance, croyant à une formalité temporaire. Quant à la cliente
R.L., elle ne savait pas que H.M. avait garanti son compte. Le même pattern a été
utilisé pour garantir le compte d’autres clients.
                                                                                       PAGE : 3

[11]      La preuve a été ensuite déclarée close de part et d’autre.

     3.      APPRÉCIATION DE LA PREUVE À L’ÉGARD DES INFRACTIONS
             REPROCHÉES
[12] Le Comité rappelle d’abord, pour le bénéfice du lecteur, que l’intimé a, dans sa
réponse fournie selon l’obligation que lui faisait l’article 14 du Statut 20, admis les faits
allégués sans cependant reconnaître les conclusions qu’en tirait l’ACCOVAM.

[13] L’article 15 du même Statut 20 stipule que le Comité peut accepter comme ayant
été prouvés les faits allégués qui n’ont pas été explicitement niés dans la réponse de
l’intimé. Or, en l’espèce, non seulement les faits n’ont-ils pas été niés, mais ils ont été
spécifiquement admis à la fois dans la réponse et dans le témoignage de l’intimé à
l’audience. Pour cette raison, le Comité estime que chaque fait exposé dans les détails
1 à 138 a été établi à sa satisfaction.

[14] Ceci précisé, pour une meilleure intelligence de sa décision, le Comité juge à
propos de reproduire un à la suite de l’autre chaque chef d’infraction et les détails le
concernant. Par la suite, le Comité exposera son appréciation de la preuve à l’égard de
ces chefs d’infraction, compte tenu des détails qui les concernent.

A)        CHEF 1

          Chef 1
          Entre septembre 2000 et février 2001 inclusivement, l’intimé, alors qu’il
          était représentant inscrit de CIBC, une société membre de l’Association, a
          effectué quelque 105 opérations discrétionnaires dans le compte de la
          cliente J.P. à l’insu et sans l’autorisation écrite préalable de cette dernière,
          et sans que le compte ait été autorisé et accepté par écrit comme compte
          carte blanche par la personne désignée du membre CIBC, en contravention
          de l’article 4 du Règlement 1300 de l’Association.

Détails

#2    L’intimé, Harry Migirdic, a été autorisé à titre de représentant inscrit le 21 mars
1980 ou vers cette date.

#4        Il a été nommé vice-président de Merrill Lynch le 21 octobre 1986 ou vers cette
date

#5     L’intimé a été transféré chez Wood Gundy (maintenant CIBC), société membre
de l’ACCOVAM, à la succursale du 600, boul. De Maisonneuve à Montréal, le 15 janvier
1990 ou vers cette date.

#6        L’intimé a été congédié le 5 avril 2001 ou vers cette date.
                                                                                 PAGE : 4

#7     Depuis son congédiement de CIBC, l’intimé n’a pas été employé par aucune
société membre et n’a pas été autorisé à quelque titre que ce soit par l’Association.

#16 Le 24 août 2000 ou vers cette date, J.P. a ouvert le compte n° 500-21169 chez
CIBC auprès de l’intimé, qui était son conseiller en placement.

#17 Au moment de l’ouverture du compte, J.P. était âgée de 68 ans; son revenu
annuel estimatif était de 24 000 $ et sa valeur nette totale s’élevait à environ 300 000 $.
Selon le profil de la cliente, les objectifs de placement étaient les suivants : 50% gains
en capital à court terme et 50% gains en capital à long terme. Les facteurs de risque du
compte étaient les suivants : 50% faible et 50% élevé. Les connaissances de la cliente
en matière de placement étaient qualifiées de «bonnes».

#18 Le profil de la cliente a été mis à jour le 24 octobre 2000 ou vers cette date, soit
deux mois après l’ouverture de son compte, et les facteurs de risque ont alors été
changés pour 50% moyen et 50% élevé.

#19 Malgré le fait que le compte de J.P. n’était pas un compte carte blanche, l’intimé
a procédé à des achats et des ventes de titres sans consulter la cliente au moment de
ces opérations ou au sujet des titres visés, de la quantité ou des prix.

#20 Entre le 6 septembre 2000 et février 2001, un total d’environ 105 opérations ont
été effectuées dans le compte de la cliente.

#21 Toutes les opérations effectuées dans le compte de J.P. ont été exécutées sur
une base discrétionnaire.

#22 Le compte de J.P. n’avait pas été autorisé et accepté par CIBC comme compte
carte blanche conformément à l’article 4 du Règlement 1300 de l’Association.

#23 CIBC a d’ailleurs ramené les comptes de J.P. à leur statut initial à partir des
renseignements contenus dans le profil de la cliente et a indemnisé celle-ci pour les
pertes qu’elle avait subies. CIBC a d’abord versé un montant de 97 400 $ à la cliente,
représentant le rendement du capital dans le compte n° 500-21169, majoré des intérêts.
CIBC a ensuite crédité le compte FERR n° 553-19545 de J.P. d’un montant de
112 000 $. Ce montant représentait aussi le rendement du capital dans le compte,
majoré des intérêts. CIBC a présenté cette offre à J.P. parce que le compte renfermait
principalement deux titres à risque élevé qui ne convenaient pas à un FERR.



[15] Soulignons en premier lieu qu’il n’est pas contesté que l’intimé était un
représentant inscrit de mars 1980 à avril 2001 (cf. détails nos 2, 4, 6 et 7) auprès de
l’Association.
                                                                                       PAGE : 5

[16] Or l’article 4 du Règlement 1300 qui s’applique entre autres aux représentants
inscrits, stipule ce qui suit :

      Article 4 : Aucune personne, à l’exception d’un associé, d’un administrateur, d’un
      dirigeant ou d’un représentant inscrit (autre qu’un représentant inscrit
      (organismes de placement collectif) ou (clients institutionnels)), qui a été autorisé
      comme tel en vertu des Statuts applicables de l’Association, ne peut effectuer
      des opérations pour un client sur un compte carte blanche, et de telles
      opérations autorisées ne pourront être effectuées que si :

          a)      le client a préalablement donné au membre une autorisation
                  écrite qui est acceptée par ce dernier conformément à l’article
                  5 du présent Règlement;

          b)      le compte a été formellement autorisé et accepté par écrit
                  comme un compte carte blanche par l’administrateur,
                  l’associé, le dirigeant, le directeur de succursale, le
                  responsable de contrats à terme ou d’options sur contrats à
                  terme désigné, selon le cas, qui a autorisé l’ouverture du
                  compte,

      et si cette personne autorisée à effectuer des opérations sur ces comptes, en
      vertu de pouvoirs discrétionnaires, négocie activement sur le marché des titres,
      des contrats à terme ou des options sur contrats à terme ou agit à titre de
      conseiller ou effectue des analyses relativement à ces marchés depuis une
      période de deux ans.

[17] Cette disposition, à son alinéa a), édicte qu’un représentant inscrit ne peut
effectuer des opérations pour un client sur un compte carte blanche, à moins que le
client n’ait préalablement fourni au membre (en l’espèce, il s’agissait ici de Wood Gundy
devenue CIBC) une autorisation écrite acceptée par ce dernier.

[18] Les détails #19, #20 et #21 établissent que même si le compte de J.P. n’était pas
un compte carte blanche, l’intimé a procédé à environ 105 opérations sans consulter sa
cliente, uniquement sur une base discrétionnaire. Ce compte de J.P. n’a pas été
autorisé par CIBC comme un compte carte blanche conformément à l’article 4 du
Règlement 1300 (cf. détail #22).

[19] Dans son témoignage, l’intimé a mentionné que ses clients (incluant donc J.P.)
savaient ou consentaient à ce qu’il procède à des transactions discrétionnaires.

[20] Cette affirmation de l’intimé, qu’elle soit ou non bien fondée, ne modifie
nullement les prescriptions de l’article 4 du Règlement 1300. Pour pouvoir effectuer
des opérations discrétionnaires sur le compte d’un client, ce dernier doit préalablement
fournir au membre (en l’espèce CIBC) une autorisation écrite et acceptée formellement
par ce dernier comme un compte carte blanche.
                                                                                 PAGE : 6

[21] Une autorisation donnée verbalement par le client n’est pas qu’une simple
contravention de formalité. Car la procédure d’autorisation a pour objectif que ces
types de compte soient gérés par des personnes convenablement qualifiées. Ces
comptes sont aussi assujettis à une surveillance plus étroite chez le membre. Il s’ensuit
qu’un compte opéré discrétionnairement sans avoir préalablement été autorisé par écrit
expose le client à un risque plus grand.

[22] Pour toutes ces raisons, le Comité estime que l’intimé a contrevenu à ce chef
d’infraction.

B)        CHEF 2

      Chef 2
      Entre septembre 2000 et février 2001 inclusivement, l’intimé, alors qu’il
      était représentant inscrit de CIBC, une société membre de l’Association, a
      effectué des opérations discrétionnaires dans le compte du client J.M. à
      l’insu et sans l’autorisation écrite préalable de ce dernier, et sans que le
      compte ait été autorisé et accepté par écrit comme compte carte blanche
      par la personne désignée du membre CIBC, en contravention de l’article 4
      du Règlement 1300 de l’Association.

Détails

#24 Le 9 septembre 2000 (on devrait lire le 19 septembre au lieu du 9) ou vers cette
date, J.M. a ouvert le compte n° 310-28106 chez CIBC auprès de l’intimé, qui était son
conseiller en placement.

#25 Au moment de l’ouverture du compte, J.M. était âgé de 80 ans; son revenu
annuel estimatif était de 35 000 $ et sa valeur nette totale s’élevait à environ 375 000 $.
Selon le profil du client, les objectifs de placement étaient les suivants : 100% gains en
capital à long terme. Les facteurs de risque du compte étaient les suivants : 45% faible,
45% moyen et 10% élevé. Les connaissances du client en matière de placement
étaient qualifiées d’«excellentes».

#26 Malgré le fait que le compte de J.M. n’était pas un compte carte blanche, l’intimé
a procédé à des achats et des ventes de titres sans consulter le client au moment de
ces opérations ou au sujet des titres visés, de la quantité ou des prix.

#27 J.M. s’est plaint à la CIBC au sujet du fait que l’intimé effectuait des opérations
sans son autorisation ou sans le consulter et que, en de nombreuses occasions, il avait
exprimé son profond désaccord à l’égard des achats effectués.

#28 Entre septembre 2000 et février 2001, un total d’environ 35 opérations ont été
effectuées dans le compte du client.
                                                                                 PAGE : 7

#29 Le compte de J.M. n’avait pas été autorisé et accepté par CIBC comme compte
carte blanche conformément à l’article 4 du Règlement 1300 de l’Association.

#30 CIBC a d’ailleurs indemnisé J.M. pour les pertes qu’il avait subies. Le montant
de l’indemnisation s’est élevé à 69 897,72$.



[23] Ce que le Comité écrivait à propos du chef 1 s’applique mutatis mutandis au chef
2. Le Comité estime donc que l’intimé a contrevenu au chef d’infraction 2.



C)    CHEFS 3 À 6

      Chef 3
      Le 8 mai 2000 ou vers cette date, l’intimé a eu une conduite inconvenante
      et préjudiciable aux intérêts du public en modifiant les objectifs de
      placement, les facteurs de risque et la valeur nette totale dans la mise à
      jour du profil du client P.A. à l’insu et sans le consentement de ce dernier,
      en contravention de l’article 1 du Statut 29 de l’Association.

      Chef 4
      Entre septembre 2000 et février 2001 inclusivement, l’intimé, alors qu’il
      était représentant inscrit de CIBC, une société membre de l’Association, a
      effectué des opérations discrétionnaires dans le compte du client P.A. à
      l’insu et sans l’autorisation écrite préalable de ce dernier, et sans que le
      compte ait été autorisé et accepté par écrit comme compte carte blanche
      par la personne désignée du membre CIBC, en contravention de l’article 4
      du Règlement 1300 de l’Association.

      Chef 5
      Le 14 mai 2000 ou vers cette date, l’intimé n’a pas observé des normes
      élevées de déontologie et de conduite et a eu une conduite inconvenante et
      préjudiciable aux intérêts du public en assumant la responsabilité de la
      baisse de valeur du portefeuille de son client P.A. et en offrant à ce dernier
      de le dédommager pour les pertes qui pouvaient en résulter entre janvier
      2000 et janvier 2001, cette offre ayant été faite à l’insu et sans le
      consentement ou l’autorisation de CIBC, en contravention de l’article 1 du
      Statut 29 de l’Association et de la Norme C du Code de déontologie et des
      normes de conduite.
                                                                                PAGE : 8

      Chef 6
      Le 1er juillet 2000 ou vers cette date, l’intimé n’a pas observé des normes
      élevées de déontologie et de conduite et a eu une conduite inconvenante et
      préjudiciable aux intérêts du public en remettant à son client P.A., à l’insu
      et sans le consentement ou l’autorisation de CIBC, un billet à ordre d’un
      montant de 400 000$ pour couvrir les pertes que le client avait subies dans
      son compte, en contravention de l’article 1 du Statut 29 de l’Association et
      de la Norme C du Code de déontologie et des normes de conduite.

Détails

#31 P.A. détenait le compte n° 500-08860 chez CIBC auprès de l’intimé, qui était son
conseiller en placement.

#32 Selon la mise à jour du profil du client datée du 4 novembre 1994, P.A. était âgé
de 65 ans; son revenu annuel estimatif était de 100 000 $ et sa valeur nette totale
s’élevait à environ 250 000 $. Les objectifs de placement du client étaient les suivants :
50% revenu et 50% gains en capital à moyen terme. Les facteurs de risque du compte
étaient «100% faible». Dans cette mise à jour, les connaissances du client en matière
de placement étaient qualifiées de «bonnes».

#33 Une nouvelle mise à jour du profil du client a été remplie le 1er septembre 1995
ou vers cette date et les facteurs de risque ont alors été changés comme suit : 70%
faible, 10% moyen et 20% élevé. La valeur nette totale du client a été portée à
600 000 $.

#34 Dans une autre mise à jour du profil du client, datée du 18 mars 1997, les
facteurs de risque ont été changés comme suit : 30% faible, 20% moyen et 50% élevé.
La valeur nette totale du client a été relevée à 1 000 000 $, et les connaissances du
client en matière de placement ont été qualifiées cette fois d’«excellentes».

#35 Une dernière mise à jour du profil du client a été remplie le 8 mai 2000 ou vers
cette date. Les objectifs de placement de P.A. ont alors été changés comme suit : 40%
revenu, 20% court terme, 30% moyen terme et 10% long terme. Les facteurs de risque
du compte ont également été changés, mais cette fois comme suit : 10% faible, 10%
moyen et 80% élevé. Enfin, la valeur nette totale du client a été portée à 1 800 000 $.

#36 L’intimé n’a pas informé P.A. des changements qu’il avait apportés dans la mise
à jour de son profil en mai 2000. P.A. ne savait pas que son profil était mis à jour en
mai 2000, aussi n’a-t-il jamais approuvé ou consenti à ces changements.

#37 Malgré le fait que le compte de P.A. n’était pas un compte carte blanche, l’intimé
a procédé à des achats et des ventes de titres sans consulter le client au moment de
ces opérations ou au sujet des titres visés, de la quantité ou des prix.
                                                                                   PAGE : 9

#38 Toutes les opérations effectuées sur des titres américains dans le compte de
P.A. ont été exécutées sur une base discrétionnaire, à l’exception des opérations
portant sur deux actions.

#39 Entre mars 1994 et février 2001, un total d’environ 1400 opérations ont été
effectuées dans le comptes de P.A. Au cours de l’année 2000, quelque 360 opérations
ont été effectuées dans le compte.

#40 Le compte de P.A. n’avait pas été autorisé et accepté par CIBC comme compte
carte blanche conformément à l’article 4 du Règlement 1300 de l’Association.

#41 De plus, entre décembre 1999 et juin 2000, le portefeuille de P.A. a perdu près
de 50% de sa valeur. Au 31 décembre 1999 ou vers cette date, le portefeuille avait une
valeur de 1 059 954,82$, et au 30 juin 2000 ou vers cette date, il ne valait plus que
471 519,21$.

#42 P.A. s’est plaint à l’intimé au sujet de ses pertes. En guise de réponse, l’intimé a
remis à son client, le 14 mai 2000 ou vers cette date, une lettre dans laquelle il disait
assumer la responsabilité de la baisse de valeur du portefeuille et s’engageait à rétablir
la valeur du portefeuille avant la clôture du troisième vendredi de janvier 2001 pour
qu’elle corresponde à la valeur détenue au 20 janvier 2000, soit 1 059 954$. L’intimé a
également écrit que, s’il n’arrivait pas à rétablir la valeur du portefeuille à son niveau de
janvier 2000, il rembourserait au titulaire du compte la différence entre la valeur au mois
de janvier 2000 et la valeur au mois de janvier 2001.

#43 L’intimé a présenté cette offre à P.A. à l’insu et sans le consentement ou
l’autorisation de CIBC.

#44 Toujours insatisfait, P.A. a envoyé une lettre à l’intimé l’enjoignant de cesser
toutes les opérations dans son compte et de lui rembourser ses pertes.

#45 Après avoir reçu la lettre de P.A., vers le 1er juillet 2000, l’intimé a offert et remis
à P.A. un billet à ordre d’un montant de 400 000 $.

#46 En plus de ce billet à ordre, l’intimé a remis à P.A. une photocopie d’une
obligation de 300 000 $ en guise de garantie.

#47 L’intimé n’a pas informé CIBC qu’il avait remis un billet à ordre à P.A., car il
espérait que les marchés se redressent et qu’il n’ait pas à rembourser P.A.

#48 En ce qui concerne le compte de P.A., l’intimé a écrit ce qui suit dans son
courriel du 26 février 2001 : (version originale anglaise) « 50008860 Discretionary
trades in options loss in account 900m».

#49 En mars 2001, CIBC a informé P.A. que l’intimé avait demandé un congé pour
des raisons de santé.
                                                                                      PAGE : 10

#50 Le 29 mars 2001 ou vers cette date, CIBC a envoyé une lettre à P.A. lui
demandant de combler l’insuffisance de couverture de 111 158 $ dans son compte en
liquidant des positions et en déposant d’autres liquidités ou d’autres titres dans le
compte. De plus, CIBC a indiqué au client que, s’il ne transférait pas des fonds ou des
titres dans son compte ou ne donnait pas des instructions appropriées en vue de la
liquidation de positions dans son compte avant la clôture des marchés le 29 mars 2001,
le compte serait liquidé à 9 h 30 le lendemain matin.

#51 P.A. a refusé de donner des instructions à CIBC pour la liquidation de ses
positions en vue de combler l’insuffisance de couverture dans son compte, et CIBC a
confirmé dans une lettre envoyé à P.A. qu’elle avait liquidé des positions à partir du 30
mars 2001.



[24] L’article 1 du Statut 29 défend à un représentant inscrit d’avoir une conduite
inconvenante et préjudiciable aux intérêts du public. Il se lit ainsi :

      1.      Les membres ainsi que chaque associé, administrateur, dirigeant,
              directeur des ventes, directeur, directeur adjoint ou codirecteur de
              succursale, représentant inscrit, représentant en placement et employé
              d’un membre (i) sont tenus d’observer des normes élevées d’éthique et
              de conduite professionnelle dans l’exercice de leur activité, (ii) ne doivent
              pas avoir de conduite ou de pratique commerciale inconvenante ou
              préjudiciable aux intérêts du public et (iii) doivent avoir le caractère, la
              réputation, l’expérience et la formation qui correspondent aux normes
              mentionnées aux points (i) et (ii) qui précèdent ou que le conseil
              d’administration peut prescrire.

              Aux fins des procédures disciplinaires prévues aux Statuts, chaque
              membre est responsable des actes et des omissions de chacun de ses
              associés, administrateurs, dirigeants, directeurs des ventes, directeurs,
              directeurs adjoints et codirecteurs de succursale, représentants inscrits,
              représentants en placement et employés, et chacune des personnes
              susmentionnées doit se conformer à tous les Statuts, Règlements et
              Principes directeurs auxquels le membre doit se conformer.

[25] Dans le cas du client P.A., la preuve a établi que le ou vers le 8 mai 2000, les
objectifs de placement du client ont été modifiés par l’intimé sans que le client n’en ait
été avisé ou n’ait consenti à ces changements (cf. pièce P-21 et détails nos 34 et 35).
L’intimé a changé le formulaire Know your client pour faire passer les facteurs de risque
élevé de 50% à 80%, de toute évidence afin de refléter l’état des transactions actuelles
et futures du compte.

[26] Les formulaires d’ouverture de compte (ci-après désignés comme FDOC)
doivent être mis à jour pour refléter les changements importants dans la situation du
                                                                                    PAGE : 11

client afin d’assurer que les recommandations de placement soient appropriées. En
l’espèce, il était loin d’être approprié de modifier à la hausse le risque des placements
de P.A. sans en avoir préalablement discuté avec lui. Une telle façon de faire
constituait certes une conduite inconvenante au sens de l’article 1 du Statut 29.

[27]   Le Comité conclut donc que le chef d’infraction 3 est bien fondé.

[28] Le chef d’infraction 4 concerne aussi le client P.A. Il fait reproche à l’intimé
d’avoir contrevenu à l’article 4 du Règlement 1300 (précédemment reproduit), en
effectuant des opérations discrétionnaires dans son compte, à son insu et sans
autorisation écrite préalable du client et sans que le membre n’ait autorisé ce compte
comme un compte carte blanche.

[29] La preuve a établi qu’au moment des transactions tout au moins,                l’intimé ne
consultait pas P.A. (cf. détail #37). Le compte n’était pas un compte carte         blanche et
les opérations au nombre d’environ 1400 ont été effectuées sur                      une base
discrétionnaire (cf. détails #37 à #39). Et enfin, le membre n’avait pas            accepté ni
autorisé le compte de P.A. comme un compte carte blanche (cf. détail #40).

[30] Le Comité réitère encore ici les propos qu’il tenait à l’égard du chef d’infraction 1
et pour ces mêmes raisons, il déclare que le chef 4 est bien fondé.

[31] Les chefs 5 et 6 sont similaires. Le premier reproche à l’intimé d’avoir offert à
son client P.A. de le dédommager pour ses pertes et ce, à l’insu du membre. Le
second, d’avoir remis à son client un billet à ordre au montant de 400 000 $ dans les
mêmes circonstances.

[32] Les deux chefs réfèrent à une contravention à l’article 1 du Statut 29, mais
également à la norme C du Code de déontologie. L’article 1 du Statut 29 a été
précédemment reproduit. Quant à la norme C du Code de déontologie, elle se lit
différemment dans ses versions anglaise et française. En effet, la version française se
lit comme suit:

       La personne inscrite doit encourager les autres à exercer leurs activités dans les
       valeurs mobilières d’une façon professionnelle, ce qui aura des retombées
       positives sur elle-même, ses employeurs et la profession. La personne inscrite
       doit aussi s’efforcer de maintenir et d’accroître ses connaissances
       professionnelles et partager avec les autres membres de la profession des
       renseignements susceptibles de les aider.

       (le soulignement est du Comité)



[33]   Quant à la version anglaise elle est pour sa part libellée ainsi :
                                                                                 PAGE : 12

      Registrants must, and should encourage others too, conduct business in a
      professionnal manner that will reflect positively on themselves, their firms and
      their profession. Registrants should also strive to maintain and improve their
      professionnal knowledge and that of others in the profession.

      (le soulignement est du Comité)

[34] Le Comité n’est pas sans noter une disparité significative dans le libellé de cette
norme selon que l’on considère la version anglaise ou française. Dans la version
anglaise, la norme exige du représentant inscrit qu’il conduise ses affaires d’une façon
professionnelle et encourage autrui à faire de même. Dans le texte français, l’obligation
semble se limiter à encourager autrui à se conduire de façon professionnelle.

[35] Cette différence entre les deux versions est déplorable et susceptible
d’engendrer de l’ambiguïté, du moins à l’égard d’un représentant inscrit qui n’aurait
consulté que la version française.

[36] Quoiqu’il en soit, dans le cas sous étude, il faut cependant convenir de deux
choses. D’une part, l’intimé utilise essentiellement la langue anglaise et il n’a jamais
prétendu avoir de quelque façon été induit en erreur par le libellé français de cette
norme, libellé qu’il n’a sans doute jamais consulté.

[37] D’autre part, l’obligation d’encourager autrui à se conduire de façon
professionnelle peut difficilement se dissocier de l’obligation d’agir soi-même de façon
professionnelle. Un représentant inscrit qui ne se conduit pas de façon professionnelle
n’incite-t-il pas autrui, n’encourage-t-il pas autrui à suivre son exemple ?

[38] Pour ces deux raisons, le Comité a décidé de ne pas se préoccuper de la
disparité des deux versions et il conclut que, selon l’une et l’autre, le but recherché
reste essentiellement le même, à savoir le professionnalisme du représentant inscrit.
Or, ce professionnalisme implique que le représentant dirige ses affaires personnelles
de façon responsable, de manière à faire honneur à son employeur et sa profession.
Pour ce faire, il doit éviter d’avoir des rapports personnels de nature financière avec un
client, comme lui prêter ou emprunter des sommes d’argent, régler les pertes d’un client
à partir de ses propres fonds et ne pas partager d’intérêt financier dans un compte avec
un client. Il doit éviter les conflits d’intérêt réels ou apparents et, le cas échéant,
divulguer une situation potentielle de conflit d’intérêt à la firme qui l’emploie.

[39] Au surplus, le fait d’agir de façon non professionnelle constitue certes une
conduite inconvenante au sens de l’article 1 du Statut 29. Cette disposition, rappelons-
le, fait obligation aux membres et aux représentants inscrits d’observer des normes
élevées d’éthique et de conduite professionnelle dans l’exercice de leur activité. Elle
défend aussi une conduite inconvenante.

[40] Si l’on revient maintenant aux faits à la source des chefs 5 et 6, la preuve a établi
que l’intimé a offert à P.A. de le dédommager pour ses pertes et ce, à l’insu et sans le
                                                                                  PAGE : 13

consentement de CIBC (cf. détails #41 et #43). De même, il a offert et remis à P.A. un
billet à ordre de 400 000,$ à l’insu et sans l’autorisation de CIBC (cf. détails #45 et #47).

[41] En agissant ainsi, qu’il ait ou non été de bonne foi, l’intimé indirectement privait
son client de son droit à se plaindre rapidement devant les instances de résolution des
différends ou encore à la société membre afin d’obtenir une indemnisation. L’intimé se
mettait à l’abri d’une plainte, faisant primer son propre intérêt sur celui de son client.

[42] Cette façon d’agir, non professionnelle pour l’ensemble des raisons que nous
avons précédemment exposées, constitue de l’avis du Comité une conduite
inconvenante, contraire à l’article 1 du Statut 29. Elle constitue aussi une contravention
à la norme C du Code de déontologie et les chefs 5 et 6 sont donc bien fondés.



D)     CHEFS 7 À 10

       Chef 7
       Le 16 février 1993 ou vers cette date, l’intimé a eu une conduite
       inconvenante de la part d’un représentant inscrit, en contravention de
       l’article 1 du Statut 29 de l’Association, en obtenant, par un faux semblant,
       la signature de H.M. pour une convention de garantie de compte donnée en
       faveur du compte de R.L.

       Chef 8
       Le 21 juillet 1995, le 31 juillet 1996, le 21 juillet 1997 et le 18 août 1997 ou
       vers ces dates, l’intimé a eu une conduite inconvenante de la part d’un
       représentant inscrit, en contravention de l’article 1 du Statut 29 de
       l’Association, en n’indiquant pas dans les mises à jour du profil de la
       cliente R.L. que le compte de H.M. et de A.M. garantissait le compte de
       cette dernière.

       Chef 9
       Le 3 octobre 1997 et le 2 août 1999 ou vers ces dates, l’intimé a eu une
       conduite inconvenante de la part d’un représentant inscrit, en
       contravention de l’article 1 du Statut 29 de l’Association, en n’indiquant pas
       dans les mises à jour du profil des clients H.M. et A.M. que R.L. avait un
       intérêt financier dans le compte de ces derniers, puisque ce compte
       garantissait le compte de R.L.

       Chef 10
       Le 25 avril 2000 ou vers cette date, l’intimé a eu une conduite inconvenante
       de la part d’un représentant inscrit, en contravention de l’article 1 du Statut
                                                                                      PAGE : 14

       29 de l’Association, en obtenant, par un faux semblant, la signature de H.M.
       pour une attestation de convention de garantie de compte donnée en
       faveur du compte de R.L.

Détails

#52       L’intimé connaissait H.M. et A.M. depuis le début des années 1980.

#53 Le 7 octobre 1986 ou vers cette date, H.M. et A.M. ont ouvert un compte conjoint
(compte n° 500-01327) chez Merril Lynch auprès de l’intimé, qui était leur conseiller en
placement.

#54 Au moment de l’ouverture du compte, H.M. était âgé de 53 ans et son épouse,
A.M., était âgée de 49 ans.

#55 L’intimé a rempli un profil de client et a fait deux mises à jour de ce profil pour le
compte de H.M. et de A.M., comme suit :



Date                      7 oct. 1986               3 oct. 1997         2 août 1999

Objectifs de placement Revenu                       100% long terme     100% long terme
                          Croissance

Facteurs de risque        Titres de bonne qualité   50% moyen           50% moyen

                          Titres spéculatifs        50% élevé           50% élevé

Revenu annuel             50 000 $                  100 000 $           100 000 $

Valeur nette totale       250 000 $                 1 000 000 $         2 000 000 $

Connaissance en                                     Bonnes              Bonnes
matière de placement




#56 En 1988, R.L. a ouvert le compte n° 500-01193 chez Merrill Lynch auprès d’un
conseiller en placement qui n’était pas l’intimé.

#57       L’intimé est devenu le conseiller en placement de R.L. par la suite.

#58       L’intimé a effectué sept (7) mises à jour du profil de R.L., comme suit :
                                                                                PAGE : 15

Date          25-3-1991   22-7-1992    21-7-1995   31-7-1996   21-7-1997      5-8-1999
                                                               18-8-1997

Objectifs de 25%          20% revenu 10%           50% court 50%        court 50% court
placement    croissance               revenu       terme     terme            terme
                          70% court
              50%
                          terme       70% court    50% long 50%           long 50% long
              croissance
                                      terme        terme    terme              terme
              avec risque 10%    long
              25%         terme       20% long
              placements              terme
              en capital
              de risque

Facteurs de               50% faible   30% moyen 30% moyen 100% élevé         100% élevé
risque
                          50% moyen 70% élevé      70% élevé

Revenu        40 000 $    40 000 $     40 000 $    40 000 $    40 000 $       40 000 $
annuel

Valeur nette 400 000 $    400 000 $    400 000 $   400 000 $   400 000 $      800 000 $
totale

Connaissan    Bonnes      Bonnes       Bonnes      Bonnes      Bonnes         Bonnes
ces en
matière de
placement




#59 En ce qui concerne le compte de H.M. et de A.M. et le compte de R.L., l’intimé a
écrit ce qui suit dans son courriel du 26 février 2001 : (version originale anglaise)
«50001327 garantees 50001193 since 1995 unaware of the guarantee dr in 50001193
320m+150 their $».

#60 En février 1993, R.L. a voulu retirer de l’argent de son compte chez CIBC mais
celui-ci affichait des pertes.

#61 Pour assurer à R.L. qu’elle pouvait retirer de l’argent de son compte, l’intimé a
fait signer à H.M., le 16 février 1993 ou vers cette date, une convention de garantie de
compte en faveur de R.L.

#62 H.M. et A.M. ne connaissaient pas R.L. et ne connaissaient pas non plus la
nature du document que H.M. signait. Ils n’étaient pas au courant des conséquences
que pouvait entraîner cette garantie. Ils n’avaient aucune raison de garantir le compte
de R.L., compte d’une personne qu’ils ne connaissaient pas.
                                                                                  PAGE : 16

#63 L’intimé a obtenu la signature de H.M. en donnant pour prétexte que la signature
était nécessaire pour l’administration du compte.

#64 Le 21 juillet 1995, le 31 juillet 1996, le 21 juillet 1997 et le 18 août 1997 ou vers
ces dates, alors qu’il mettait à jour le profil de la cliente R.L., l’intimé a omis d’indiquer
que le compte de H.M. et de A.M. garantissait le compte de celle-ci.

#65 Le 3 octobre 1997 et le 2 août 1999 ou vers ces dates, alors qu’il mettait à jour le
profil de client de H.M. et de A.M., l’intimé a omis d’indiquer que R.L. avait un intérêt
financier dans le compte de H.M. et de A.M., puisque ce dernier garantissait le compte
de R.L.

#66 Le 25 avril 2000 ou vers cette date, l’intimé a fait signer à H.M., par un faux
semblant, une lettre confirmant la garantie de compte donnée en faveur du compte de
R.L.



[43] Le chef 7 reproche à l’intimé une conduite inconvenante au sens de l’article 1 du
Statut 29 précédemment reproduit, en ce que le 16 février 1993, il aurait obtenu par un
faux semblant la signature de son client H.M. pour une convention de garantie en
faveur d’une autre cliente, R.L.

[44] À ce sujet, les détails #60 à #63 établissent la cause de reproche. La garantie
datée du 16 février 1993 (pièce P-48) a été signée par H.M. en faveur de R.L. Le
premier ne connaissait pas la seconde et n’avait aucun avantage, ni aucune raison à
garantir ce compte. S’il a signé la convention de garantie, c’était parce que l’intimé lui a
laissé croire que ce document était une formalité nécessaire pour l’administration de
son propre compte.

[45] Il s’agissait certes là d’une supercherie, d’un faux semblant. L’intimé a fait de
fausses représentations à H.M. pour obtenir cette garantie sur le compte de R.L. Il a
ainsi causé préjudice à H.M. en plus de porter atteinte à la confiance du public dans la
profession dans son ensemble.

[46] De tels agissements ont déjà été jugés contraires à l’article 1 du Statut 29,
notamment dans une affaire impliquant Patrick Teggart1. Monsieur Teggart avait
obtenu la signature de deux clients pour la garantie de comptes alors que ces deux
clients ne savaient pas ou ne comprenaient pas la nature du document signé.

[47] Le Comité n’a donc aucune hésitation à conclure en une contravention à l’article
1 du Statut 29 et à déclarer bien fondé le chef 7.



1
    ACCOVAM vs Patrick Teggart, Bulletin de l’Accovam, no. 3138, 24 avril 2003;
                                                                                 PAGE : 17

[48] Le chef 8 reproche à l’intimé une conduite inconvenante en contravention avec
l’article 1 du Statut 29 en n’indiquant pas dans les mises à jour du profil de la cliente
R.L. que le compte de H.M. et A.M. garantissait son propre compte.

[49] La preuve établit qu’aux quatre dates mentionnées au chef d’infraction 8 des
formulaires de mise à jour du compte de R.L. ont été remplis par l’intimé (pièces P-42 à
P-45 et détail #64). Nulle part n’y lit-on qu’H.M. et A.M. ont un intérêt financier dans le
compte de R.L. en ce qu’ils garantissaient son compte, et ce malgré que le formulaire
prévoie une case où on doit indiquer ce renseignement.

[50] Il ne fait pas de doute que la mise à jour du FDOC est un corollaire de la règle de
la connaissance du client. L’omission d’y inscrire un renseignement aussi important
que celui-là constituait certes une conduite inconvenante car la documentation ne
reflétait pas un changement important dans la situation du client.

[51]   Le chef 8 est donc bien fondé.

[52] Le chef 9 est le pendant du chef 8. Lors des mises à jour du compte de H.M. et
A.M., l’intimé a omis d’indiquer que R.L. avait un intérêt financier dans leur compte, du
fait que le compte de cette dernière était garanti par le leur. Le détail #65 et les pièces
P-35 et P-36 en établissent la preuve et le Comité estime que ce chef doit également
être retenu.

[53] Le chef 10 reproche encore une contravention à l’article 1 du Statut 29 en ce que
le 25 avril 2000, l’intimé aurait obtenu par un faux semblant la signature de H.M.,
attestant une convention de garantie donnée en faveur du compte de R.L.

[54] Bien que le Comité s’interroge sur l’étendue de la naïveté de H.M. à la lecture du
document signé par ce dernier (cf. P-49), il conclut néanmoins de la preuve que ce chef
d’infraction a été établi. En effet, l’intimé a admis avoir incité H.M. à signer ce
document suite à un faux semblant (cf. détail #66). Il a également reconnu le fait,
lorsqu’il a été interrogé par l’enquêteur Rondeau (cf. pièce P-5 à la page 8). Il lui
expliquait en effet avoir probablement mentionné à H.M. et A.M. que la convention de
garantie avait été fournie par erreur et que ce malentendu allait être arrangé bientôt.



E)     CHEFS 11 ET 12

       Chef 11
       Le 16 février 2001 ou vers cette date, l’intimé, alors qu’il était représentant
       inscrit de CIBC, a effectué une opération discrétionnaire dans le compte de
       H.M. à l’insu et sans l’autorisation écrite préalable de ce dernier, et sans
       que le compte ait été autorisé et accepté par écrit comme compte carte
                                                                                PAGE : 18

      blanche par la personne désignée du membre CIBC, en contravention de
      l’article 4 du Règlement 1300 de l’Association.

      Chef 12
      Le 16 février 2001 ou vers cette date, l’intimé, alors qu’il était représentant
      inscrit de CIBC, a effectué une opération discrétionnaire dans le compte de
      la cliente A.M. à l’insu et sans l’autorisation écrite préalable de cette
      dernière, et sans que le compte ait été autorisé et accepté par écrit comme
      compte carte blanche par la personne désignée du membre CIBC, en
      contravention de l’article 4 du Règlement 1300 de l’Association.

Détails

#67 Le 16 février 2001 ou vers cette date, pendant que H.M. et A.M. étaient en
voyage à l’étranger, 11 300 actions de Intergold Ltd. ont été achetées à un coût de
22 587,50 $ dans le compte REER n° 550-41038 de A.M. sans l’autorisation de la
cliente.

#68 De même, le 16 février 2001 ou vers cette date, pendant que H.M. et A.M.
étaient en voyage à l’étranger, 11 000 actions de Intergold Ltd. ont été achetées à un
coût de 21 990,50 $ dans le compte REER n° 550-41039 de H.M. sans l’autorisation du
client.

#69 CIBC a annulé les opérations du 16 février 2001 sur les actions d’Intergold et a
redressé les comptes REER en conséquence après que H.M. et A.M. eurent porté
plainte.

#70 Malgré le fait que les comptes REER de H.M. et de A.M. n’étaient pas des
comptes carte blanche, l’intimé a procédé aux achats d’actions d’Intergold sans
consulter les clients.

#71 Les comptes de H.M. et de A.M. n’avaient pas été autorisés et acceptés comme
comptes carte blanche par CIBC conformément à l’article 4 du Règlement 1300 de
l’Association.

#72 Au début de mars 2001, CIBC a informé H.M. et A.M. que l’intimé avait demandé
un congé pour des raisons de santé.

#73 Le 16 mars 2001 ou vers cette date, H.M. et A.M. ont envoyé une lettre à CIBC
demandant qu’aucune opération ne soit effectuée dans leurs comptes sans leur
autorisation écrite préalable.   H.M. et A.M. avaient également appris qu’ils
garantissaient le compte de R.L.

#74 Le 19 juin 2001 ou vers cette date, CIBC a envoyé une lettre à R.L. et une copie
conforme de cette lettre à H.M. et A.M., demandant à R.L. de prendre les arrangements
                                                                              PAGE : 19

financiers nécessaires pour verser à la société le paiement intégral du solde dû de
356 824,91 $CA au plus tard le 26 juin 2001. CIBC a également informé la cliente que,
si elle ne fournissait pas ledit paiement, CIBC allait exercer ses droits à l’égard du
compte de H.M. et de A.M. qui garantissait le compte de R.L.

#75 CIBC a finalement vendu les positions détenues dans le compte de H.M. et de
A.M. pour couvrir le solde que devait R.L.



[55] Le Comité réitère ici ce qu’il écrivait en rapport avec le chef 1. Il s’agissait
encore ici d’opérations discrétionnaires dans deux comptes qui n’étaient pas des
comptes carte blanche. Ces opérations ont été faites à l’insu et sans autorisation
préalable des clients et sans que leur compte n’ait été autorisé et accepté par le
membre comme un compte carte blanche.

[56] Les détails #67 à #71 établissent la culpabilité de l’intimé sous chacun des deux
chefs.



F)    CHEFS 13 À 17

      Chef 13
      Le 28 mars 1994 ou vers cette date, l’intimé a eu une conduite
      inconvenante de la part d’un représentant inscrit, en contravention de
      l’article 1 du Statut 29 de l’Association, en obtenant, par un faux semblant,
      la signature de H.M. à titre d’actionnaire principal de X inc. pour une
      convention de garantie de compte donnée en faveur du compte de S.G.

      Chef 14
      Le 31 octobre 1995, le 17 octobre 1996, le 15 octobre 1997, le 19 octobre
      1998 et le 20 octobre 1999 ou vers ces dates, I'intimé a eu une conduite
      inconvenante de la part d'un représentant inscrit, en contravention de
      l'article 1 du Statut 29 de l'Association, en obtenant, par un faux semblant,
      la signature de H.M. à titre d'actionnaire principal de X inc pour une
      attestation de convention de garantie de compte donnée en faveur du
      compte de S.G.

      Chef 15
      Le 13 mars 1997, le 30 septembre 1997 et le 21 mai 1998 ou vers ces dates,
      I'intimé a eu une conduite inconvenante de la part d'un représentant inscrit,
      en contravention de l'article 1 du Statut 29 de l'Association, en n'indiquant
                                                                                             PAGE : 21

Facteurs       Titres de    Titres     100% élevé       10% faible     50%           100% élevé     100% élevé
de risque      bonne        spéculatif                                 moyen
               qualité      s                           10% moyen
                                                                       50% élevé
                                                        80% élevé

Revenu         20 000 $     50 000 $      100 000 $     100 000 $      100 000 $     100 000 $      100 000 $
annuel

Valeur       100 000 $ 200 000 $ 250 000 $              300 000 $      500 000 $     500 000 $      1 000 000 $
nette totale

Connaissa                                 Excellentes   Excellentes    Excellentes   Excellentes    Excellentes
nces en
matière de
placement




#80 Le 15 novembre 1993 ou vers cette date, H.M. et A.M. ont ouvert le compte n°
500-00204 au nom de X inc., leur société de portefeuille, chez CIBC auprès de l’intimé,
qui était leur conseiller en placement.

#81 L’intimé a rempli un profil de client pour X inc. et effectué trois (3) mises à jour de
ce profil, comme suit :



Date                       15 nov. 1993         18 sept. 1995        30 sept. 1997    21 mai 1998

Objectifs de
                           80% revenu           80% revenu           80% revenu       80% revenu
placement                  20% long terme       20% long terme       20% long terme 20% long terme

Facteurs de risque         100% faible          50% faible           50% faible       100% élevé
                                                50% moyen            50% moyen

Valeur nette totale        1 000 000 $          1 000 000 $          1 000 000 $      1 000 000 $

Connaissance en      Excellentes                Excellentes          Excellentes      Excellentes
matière de placement




#82 En ce qui concerne les comptes de X inc. et de S.G., l’intimé a écrit ce qui suit
dans son courriel du 26 février 2001 : (version originale anglaise) «50000204
guarantees 31006094 since 1995 unaware of the guarantee dr in 31006094 1mm».
                                                                                    PAGE : 20

       pas dans les mises à jour du profil du client S.G. que le compte de X inc.
       garantissait le compte de ce dernier.

       Chef 16
       Le 18 septembre 1995, le 30 septembre 1997 et le 21 mai 1998 ou vers ces
       dates, l’intimé a eu une conduite inconvenante de la part d’un représentant
       inscrit, en contravention de l'article 1 du Statut 29 de l'Association, en
       n'indiquant pas dans les mises à jour du profil de X inc. que S.G. avait un
       intérêt financier dans le compte de cette dernière, puisque ce compte
       garantissait le compte de S.G.

       Chef 17
       Le 21 mai 1998 ou vers cette date, I'intimé a eu une conduite inconvenante
       et préjudiciable aux intérêts du public en relevant à « 100 % élevé» la
       tolérance du risque indiquée dans la mise à jour du profil de X inc., à I'insu
       et sans le consentement de cette dernière, en contravention de l'article 1
       du Statut 29 de I'Association.

Détails

#76 En novembre 1983, S.G. a ouvert un compte chez Merrill Lynch auprès de
l’intimé, qui était son conseiller en placement. L’adresse indiquée dans le formulaire
d’ouverture de compte était à la Place Bonaventure; aucun numéro d’assurance sociale
n’a été inscrit sur le formulaire, ni aucun nom de personne ayant un intérêt financier ou
une autorisation de négocier à l’égard du compte.

#77       S.G. est l’oncle de l’intimé, et vivait alors en Turquie.

#78       S.G. est maintenant âgé de 73 ans.

#79 L’intimé a rempli un profil de client et effectué sept (7) mises à jour de ce profil,
comme suit :

Date          24-11-      7-11-      7-5-1992       13-3-1997    30-9-1997   21-5-1998   10-6-1999
              1983        1985
                                     10-2-1994

Objectifs     Revenu      Revenu     100%     court 80% court 80% court 80% court 80%           court
de                                   terme          terme     terme     terme     terme
placement
                                                    10%          10%         10% moyen 10% moyen
                                                    moyen        moyen       terme     terme
                                                    terme        terme
                                                                      10% long 10%              long
                                                    10% long 10% long terme    terme
                                                    terme    terme
                                                                               PAGE : 22

#83 Le 28 mars 1994 ou vers cette date, l’intimé a fait signer à H.M., au nom de X
inc., une convention de garantie de compte en faveur de S.G.

#84 H.M. ne connaissait pas S.G. et n’était pas au courant des conséquences de
cette garantie. Il n’avait aucune raison de faire garantir le compte de S.G. par sa
société X inc., compte dont il ne connaissait pas le titulaire.

#85 L’intimé a obtenu la signature de H.M. en donnant pour prétexte que celle-ci était
nécessaire pour l’administration du compte.

#86 Le 31 octobre 1995, le 17 octobre 1996, le 15 octobre 1997, le 19 octobre 1998
et le 20 octobre 1999 ou vers ces dates, l’intimé a obtenu, par un faux semblant, la
signature de H.M. à titre d’actionnaire principal de X inc. pour une attestation de
convention de garantie en faveur du compte de S.G.

#87 Le 18 septembre 1995 ou vers cette date, l’intimé a modifié les facteurs de
risque indiqués dans le profil de client de X inc., comme suit : 50% faible et 50% moyen.
De plus, l’intimé a omis d’indiquer dans la mise à jour du profil de client que S.G. avait
un intérêt financier dans le compte de X inc. puisque celui-ci garantissait le compte de
S.G.

#88 Dans une mise à jour du profil du client S.G., datée du 13 mars 1997, le nom de
P.G. est indiqué en réponse aux questions suivantes : «Est-ce que d’autres personnes,
incluant le conseiller financier ont une autorisation de négocier dans ce compte ?, ont
un intérêt financier dans ce compte ?, garantissent ce compte ?». L’intimé a omis
d’indiquer dans cette mise à jour que X inc. garantissait le compte de S.G.

#89 Dans une mise à jour du profil du client S.G., datée du 30 septembre 1997, les
facteurs de risque ont été changés comme suit : 50% moyen et 50% élevé, et la valeur
nette totale a été changée pour 500 000 $. De plus, le nom de P.G. a été indiqué en
regard des questions suivantes : «Est-ce que d’autres personnes, incluant le conseiller
financier ont une autorisation de négocier dans ce compte ?, ont un intérêt financier
dans ce compte ?, garantissent ce compte?». L’intimé a omis d’indiquer dans cette
mise à jour que X inc. garantissait le compte de S.G.

#90 Le même jour, soit le 30 septembre 1997 ou vers cette date, l’intimé a déposé
une mise à jour du profil de X inc., mais n’a apporté aucun changement par rapport à
l’information qui se trouvait dans la dernière version du profil remontant à 1995. Les
objectifs de placement étaient toujours les suivants : 80% revenu et 20% long terme.
Les facteurs de risque étaient 50% faible et 50% moyen et la valeur nette totale était de
1 000 000 $. L’intimé n’a pas indiqué dans la mise à jour que le compte de X inc.
garantissait le compte de S.G.

#91 Le 21 mai 1998 ou vers cette date, l’intimé a préparé une mise à jour du profil de
X inc. et a changé les facteurs de risque pour les porter à 100% élevé. L’intimé a mis à
jour le profil de X inc. à l’insu et sans le consentement de cette dernière.
                                                                                 PAGE : 23

#92 Le même jour, soit le 21 mai 1998 ou vers cette date, le profil du client S.G. a
aussi été mis à jour, et les facteurs de risque ont été portés à 100% élevé.

#93 Dans les mises à jour des profils de X inc. et de S.G., datées du 21 mai 1998,
l’intimé a omis d’indiquer que le compte de X inc. garantissait le compte de S.G.

#94 Le 10 juin 1999 ou vers cette date, le profil du client S.G. a été modifié de façon
à indiquer que le compte de X inc. garantissait le compte de S.G. Avant juin 1999,
jamais le profil du client S.G. n’avait été modifié pour indiquer que le compte de ce
dernier était garanti par le compte n° 500-00204 de X inc.

#95 Le 6 mars 2001 ou vers cette date, le superviseur de l’intimé, Thomas Noonan, a
envoyé une lettre à X inc. l’informant que l’intimé avait demandé un congé pour des
raisons de santé.

#96 Le 16 mars 2001 ou vers cette date, X inc. a envoyé une lettre à CIBC
demandant qu’aucune opération ne soit effectuée dans son compte sans son
autorisation écrite préalable.

#97 Le 24 octobre 2001 ou vers cette date, CIBC a transféré une somme de
691 936,30 $ du compte de X inc. au compte de S.G. aux termes de la convention de
garantie, ce qui a laissé un solde en espèces de 0 $ dans le compte de X inc. De plus,
CIBC a transféré le même jour une somme de 11 008,86 $ du compte de H.M. et A.M.
au compte de S.G., laissant un solde en espèces de 2,54$ dans le compte de ces
derniers.



[57] Le chef 13 reproche une conduite inconvenante contraire à l’article 1 du Statut
29 en obtenant la signature de H.M. à titre d’actionnaire du compte de X inc. pour une
convention de garantie de compte en faveur du compte de S.G.

[58] Le détail #83 fait la preuve que le 28 mars 1994, l’intimé a fait signer à H.M. au
nom de X inc. une convention de garantie en faveur de S.G. Or, H.M. ne connaissait
pas S.G. (détail #84) et n’avait aucune raison de consentir à une telle garantie. Il l’a fait
parce que l’intimé lui a fait croire que sa signature était une formalité nécessaire à son
propre compte (cf. P-5, à la page 5 et détail #85).

[59] Le Comité réitère ici les remarques qu’il faisait en rapport avec le chef
d’infraction 7 et conclut à la culpabilité de l’intimé.

[60] Le chef 14 reproche à l’intimé d’avoir eu une conduite inconvenante au sens de
l’article 1 du Statut 29 en ce que, en cinq occasions différentes, il a obtenu par un faux
semblant la signature de H.M. attestant que X inc. avait consenti une convention de
garantie en faveur du compte de S.G.
                                                                                 PAGE : 24

[61] Encore une fois, le Comité s’interroge sérieusement sur la naïveté de H.M. et sur
la confiance qu’il mettait en l’intimé. Quoiqu’il en soit, ce dernier a admis le détail #86
où l’on peut lire qu’il a obtenu par un faux semblant la signature de H.M. Le Comité est
donc d’avis que la preuve établit la culpabilité de l’intimé sur ce chef.

[62] Le chef 15 reproche à l’intimé une contravention à l’article 1 du Statut 29 en
n’indiquant pas lors des mises à jour du profil du client S.G. que le compte de X inc.
garantissait le sien. Il s’agissait pourtant là d’une information de première importance
que l’intimé avait l’obligation de consigner au formulaire. Les détails #88, #89 et #93
constituent la preuve à l’encontre de l’intimé. Ce chef est donc bien fondé.

[63] Le chef 16 est le pendant du chef 15. L’intimé, dans les mises à jour du compte
du client X inc., a omis d’indiquer que S.G. avait un intérêt financier dans le compte.
Les détails #87, #90 et #93 établissent la culpabilité de l’intimé sur le chef 16.

[64] Le chef 17 vise une modification du taux de tolérance du risque d’un client à
l’insu et sans le consentement du client. Le détail #91 établit cette cause de reproche.
Et le Comité n’est pas sans noter que l’intimé, le même jour, avait mis à jour le profil du
client S.G. (cf. détail #92) dont le compte était garanti par X inc., la concordance étant
nécessaire entre le compte garanti et le compte garant.

[65] La modification des facteurs de tolérance au risque élevé est un élément
fondamental du compte d’un client. De procéder à un changement à cet égard sans
l’autorisation ou le consentement du client constitue certes une inconduite grave et il ne
fait aucun doute que cela entraîne une contravention à l’article 1 du Statut 29.



G)       CHEF 18

         Chef 18
         Le 24 juillet 1996 ou vers cette date, I'intimé. a eu une conduite
         inconvenante de la part d'un représentant inscrit, en contravention de
         l'article 1 du Statut 29 de l'Association, en obtenant, par un faux semblant,
         la signature de L.N. pour une convention de garantie de compte donnée en
         faveur du compte de S.G.

Détail

#98 Le 24 juillet 1996 ou vers cette date, l’intimé a fait signer à L.N., par un faux
semblant, une convention de garantie au nom de Z inc. en faveur de S.G. Cette
garantie a été révoquée dès le 22 août 1996. L.N. ne connaissait pas S.G. et n’avait
aucune raison de garantir le compte de ce dernier.
                                                                                    PAGE : 25

[66] Il s’agit encore ici de l’obtention par un faux semblant de la signature d’un client
pour garantir le compte d’un autre client, inconnu du garant.

[67] Bien que la garantie ait été rapidement révoquée par le garant, le détail #98 fait
la preuve que l’intimé a obtenu par un faux semblant la signature de L.N. lequel, au
nom de Z inc., garantissait le compte de S.G.

[68] Pour les mêmes motifs que ceux exprimés à l’égard du chef 7, le Comité conclut
à la culpabilité de l’intimé.



H)        CHEF 19

       Chef 19
       Le 3 juin 1993 ou vers cette date, I'intimé a eu une conduite inconvenante
       de la part d'un représentant inscrit, en contravention de l'article 1 du Statut
       29 de l’Association, en obtenant, par un faux semblant, la signature de K.P.
       pour une convention de garantie de compte donnée en faveur du compte
       de A.P. et B.P.

Détails

#99 Le 1er août 1984 ou vers cette date, A.P. et B.P. ont ouvert un compte conjoint
chez Merrill Lynch auprès de l’intimé.

#100 L’intimé a rempli un profil de client pour A.P. et B.P. et effectué six (6) mises à
jour de ce profil, comme suit

Date         1-8-1984   22-7-1992     3-9-1996   1-10-1997   11-2-1998   5-6-1998     5-4-1999

Objectifs
             Revenu
                        70%           50%        50%         50% court 50% court 50% court
de                      revenu        revenu     revenu      terme     terme     terme
placement
                        30% court 50% court 50% court 50%                50%          50%
                        terme     terme     terme     moyen              moyen        moyen

Facteurs     Titres     70% titres 100%          50% moyen   50% moyen   100%         100% élevé
de risque    sûrs       sûrs       élevé                                 élevé
                                                 50% élevé   50% élevé
                        30% titres
                        spéculatifs

Revenu       100 000 $ 100 000 $      100 000 $ 100 000 $    100 000 $   100 000 $    100 000 $
annuel
                                                                                         PAGE : 26

Valeur       500 000 $ 400 000 $        400 000 $ 400 000 $       400 000 $     400 000 $     800 000 $
nette
totale

Connaissa                 Excellentes   Excellentes Excellentes   Excellentes   Excellentes   Excellentes
nces en
matière de
placement




#101 Le 18 décembre 1984 ou vers cette date, K.P. a ouvert un compte chez Merrill
Lynch auprès de l’intimé, qui était son conseiller en placement. Au moment de
l’ouverture du compte, K.P. était âgée de 55 ans.

#102 K.P. a le même nom de famille que A.P. et B.P., mais n’a aucun lien de parenté
avec ces derniers.

#103 L’intimé a rempli un profil de client pour K.P. et effectué six (6) mises à jour de ce
profil, comme suit :



Date           18-12-1984 20-4-1993        19-7-1993    1-10-1997     5-6-1998        13-7-2000
                                           31-7-1996

Objectifs de
               Revenu
                             100%          25%          25%           25% revenu      50%     court
placement                    revenu        revenu       revenu                        terme
                                                               25%   court
                                           25% court 25% court terme
                                                                           50%                 long
                                           terme     terme
                                                               25% moyen terme
                                           25%       25%       terme
                                           moyen     moyen
                                                               25%    long
                                           terme     terme
                                                               terme
                                           25% long 25% long
                                           terme     terme

Facteurs de Titres sûrs      50% faible    50% faible   50% moyen 100% élevé          20% faible
risque
                                                                                      20% moyen
                             50%           50% élevé    50% élevé
                             moyen                                                    60% élevé

Revenu         25 000 $      100 000 $     100 000 $    100 000 $     100 000 $       100 000 $
annuel

Valeur nette 100 000 $       1 500 000     1 500 000    1 500 000     1 500 000 $     1 000 000 $
totale                       $             $            $
                                                                                PAGE : 27

Connaissan               Bonnes       Bonnes      Bonnes       Bonnes        Bonnes
ces en
matière de
placement




#104 Le fils de K.P., R.P., avait aussi ouvert un compte chez Merrill Lynch auprès de
l’intimé quelques jours avant sa mère. Ses objectifs de placement et sa tolérance du
risque étaient les mêmes que ceux de sa mère. Sa valeur nette totale était d’environ
250 000 $ et son revenu annuel était de 100 000 $.

#105 Le 19 avril 1993 ou vers cette date, K.P., qui était alors âgée de 64 ans, a signé
une autorisation de négocier en faveur de son fils R.P.

#106 Une mise à jour du profil de la cliente a été remplie le jour suivant, soit le 20 avril
1993 ou vers cette date, dans laquelle les objectifs de placement ont été changés pour
100% revenu, et les facteurs de risque ont été changés pour 50% faible et 50% moyen.
La valeur nette totale estimative a été portée à 1 500 000 $ et le revenu annuel a été
relevé à 100 000 $. Sur le formulaire, on retrouve la mention suivante : (version
originale anglaise) «R.P. (son) will be managing account».

#107 En ce qui concerne le compte de A.P. et B.P. et le compte de K.P., l’intimé a
écrit ce qui suit dans son courriel du 26 février 2001 : (version originale anglaise)
«50001555 guarantees 5001628 since 1995 unaware of the guarantee dr in 50001628
300m».

#108 Le 3 juin 1993 ou vers cette date, l’intimé a fait signer à K.P. une convention de
garantie de compte en faveur de A.P. et B.P. L’intimé a obtenu la signature de K.P. en
donnant pour prétexte que celle-ci était nécessaire pour l’administration du compte.

#109 K.P. ne connaissait pas A.P. et B.P. et n’avait aucune raison de garantir le
compte de personnes qu’elle ne connaissait pas.

#110 L’intimé n’a pas informé K.P. que le document qu’elle signait servait à garantir le
compte de A.P. et B.P. Il ne l’a pas informée non plus des conséquences de cette
garantie.

#111 De plus, R.P. a signé une convention de garantie en faveur de K.P.



[69] Le chef 19 reproche à l’intimé d’avoir eu une conduite inconvenante en obtenant
par un faux semblant la signature de K.P. pour une convention de garantie de compte
en faveur du compte de A.P. et B.P.
                                                                                     PAGE : 28

[70] Les détails #108 à #110 établissent la conduite de l’intimé eu égard à ce chef
d’accusation. Pour les mêmes motifs que ceux exposés au sujet du chef d’infraction 7,
le Comité estime que l’intimé s’est livré à une conduite inconvenante au sens de l’article
1 du Statut 29 de l’Association.



I)        CHEFS 20 À 23

      Chef 20
      Le 19 juillet 1993, le 31 juillet 1996, le 1er octobre 1997, le 5 juin 1998 et le 13
      juillet 2000 ou vers ces dates, l’intimé a eu une conduite inconvenante de la
      part d’un représentant inscrit, en contravention de l’article 1 du Statut 29 de
      l’Association, en n’indiquant pas dans les mises à jour du profil de la
      cliente K.P. que A.P. et B.P. avaient un intérêt financier dans le compte de
      cette dernière, puisque ce compte garantissait le leur.

      Chef 21
      Le 3 septembre 1996, le 1er octobre 1997, le 11 février 1998 et le 5 juin 1998
      ou vers ces dates, l’intimé a eu une conduite inconvenante de la part d’un
      représentant inscrit, en contravention de l’article 1 du Statut 29 de
      l’Association, en n’indiquant pas dans les mises à jour du profil des clients
      A.P. et B.P. que le compte de K.P. garantissait le compte de ces derniers.

      Chef 22
      Le 25 juin 1998 ou vers cette date, l’intimé a eu une conduite inconvenante
      de la part d’un représentant inscrit, en contravention de l’article 1 du Statut
      29 de l’Association, en obtenant, par un faux semblant, la signature de R.P.
      pour une attestation de convention de garantie de compte donnée par K.P.
      en faveur du compte de A.P. et B.P., et en donnant la fausse promesse que
      la garantie serait révoquée.

          Chef 23
      Le 31 mars 1999 ou vers cette date, l’intimé a eu une conduite
      inconvenante de la part d’un représentant inscrit, en contravention de
      l’article 1 du Statut 29 de l’Association, en obtenant, par un faux semblant,
      la signature de K.P. pour une attestation de convention de garantie de
      compte donnée en faveur du compte de A.P. et B.P.

Détails

#112 Le 19 juillet 1993 ou vers cette date, les objectifs de placement indiqués dans le
profil de la cliente K.P. ont été changés comme suit : 25% revenu, 25% court terme,
                                                                               PAGE : 29

25% moyen terme et 25% long terme. Les facteurs de risque ont aussi été changés
comme suit : 50% faible et 50% élevé. L’intimé a omis d’indiquer dans la mise à jour du
profil de la cliente que A.P. et B.P. avaient un intérêt financier dans le compte de cette
dernière puisque ce compte garantissait le leur.

#113 K.P. a nommé son fils R.P. à titre de mandataire en signant une «procuration» à
cet effet le 15 juillet 1994 ou vers cette date.

#114 Le jour suivant, soit le 16 juillet 1994 ou vers cette date, K.P. a signé un autre
formulaire de Wood Gundy pour donner à son fils l’autorisation de signer des chèques
sur son compte.

#115 Une autre mise à jour du profil de la cliente K.P. a été déposée le 31 juillet 1996
ou vers cette date. Aucune modification n’a été apportée au profil.

#116 Le 3 septembre 1996 ou vers cette date, alors qu’il mettait à jour le profil des
clients A.P. et B.P., l’intimé a omis d’indiquer dans la mise à jour que le compte de K.P.
garantissait le compte de A.P. et B.P.

#117 Le 1er octobre 1997 ou ves cette date, les facteurs de risque du compte de K.P.
ont été relevés à 50% moyen et 50% élevé, comme le montre la mise à jour du profil de
la cliente.

#118 Le même jour, soit le 1er octobre 1997 ou vers cette date, les facteurs de risque
du compte de A.P. et B.P. ont été abaissés à 50% moyen et 50% élevé. Le compte de
K.P. et le compte de A.P. et B.P. comportaient ainsi les mêmes facteurs de risque.

#119 Dans les mises à jour du profil de A.P. et B.P. et du profil de K.P., datées du 1er
octobre 1997, l’intimé a omis d’indiquer que le compte de K.P. garantissait le compte
de A.P. et B.P.

#120 Le 11 février 1998 ou vers cette date, les objectifs de placement de A.P. et B.P.
ont été changés comme suit : 50% court terme et 50% moyen terme. L’intimé n’a
toujours pas indiqué dans la mise à jour que le compte de K.P. garantissait le compte
de A.P. et B.P.

#121 Le 5 juin 1998 ou vers cette date, les facteurs de risque du compte de K.P. ont
encore été relevés, cette fois à 100% élevé, comme le montre la mise à jour du profil de
la cliente.

#122 Le même jour, soit le 5 juin 1998 ou vers cette date, les facteurs de risque du
compte de A.P. et de B.P. ont également été portés à 100% élevé. Le compte de K.P.
et le compte de A.P. et de B.P. comportaient ainsi de nouveau les mêmes facteurs de
risque.
                                                                                 PAGE : 30

#123 Dans les mises à jour du profil de A.P. et B.P. et du profil de K.P., datées du 5
juin 1998 l’intimé a omis d’indiquer que le compte de K.P. garantissait le compte de A.P.
et B.P.

#124 Le 25 juin 1998 ou vers cette date, le superviseur de l’intimé, Thomas Noonan, a
envoyé une lettre à K.P. demandant à celle-ci de confirmer la garantie de compte
donnée en faveur du compte de A.P. et B.P.

#125 R.P. a signé sur cette lettre de confirmation le nom de sa mère ainsi que son
propre nom, l’intimé lui ayant fait la promesse que la garantie serait révoquée. R.P. n’a
fait aucun suivi à ce sujet, car il faisait confiance à l’intimé et était assuré que celui-ci
allait révoquer la garantie, chose qu’il n’a jamais faite.

#126 Le 31 mars 1999 ou vers cette date, le superviseur de l’intimé, Thomas Noonan,
a envoyé une autre lettre à K.P. lui demandant encore une fois de confirmer la garantie
donnée à l’égard du compte de A.P. et B.P. Cette fois, seule K.P. a signé la lettre de
confirmation, et c’est l’intimé qui la lui a fait signer. K.P. ne connaissait pas la nature
du document qu’elle signait ni les conséquences de la garantie donnée à l’égard du
compte de A.P. et de B.P.

#127 Une autre mise à jour du profil des clients A.P. et B.P. a été déposée le 5 avril
1999 ou vers cette date. Aucune modification n’a été apportée au profil, sauf une
mention selon laquelle le compte n° 500-01555 de K.P. garantissait le compte de A.P.
et B.P.

#128 Le 13 juillet 2000 ou vers cette date, l’intimé a omis d’indiquer dans la mise à
jour du profil de la cliente K.P. que A.P. et B.P. avaient un intérêt financier dans le
compte de celle-ci.

#129 Le 6 mars 2001 ou vers cette date, le superviseur de l’intimé, Thomas Noonan, a
envoyé une lettre à R.P. l’informant que l’intimé avait demandé un congé pour des
raisons de santé.

#130 Le 1er avril 2001 ou vers cette date, R.P. a envoyé une plainte écrite à Thomas
Noonan au sujet des agissements de l’intimé et de CIBC.

#131 Le 2 avril 2001 ou vers cette date, au domicile de R.P., l’intimé a signé une lettre
préparée par R.P., lettre dans laquelle il confirmait avoir obtenu la signature de K.P. à
l’égard de la convention de garantie du 3 juin 1993 sans avoir informé la cliente de la
nature du document.

#132 L’intimé a également confirmé avoir obtenu la signature de R.P. le 25 juin 1998
sous le prétexte que la convention de garantie avait été établie par erreur et en donnant
la promesse que ladite garantie serait révoquée.
                                                                                  PAGE : 31

#133 Le 4 avril 2001 ou vers cette date, CIBC a envoyé une lettre à A.P. et B.P., et
une copie conforme de cette lettre à K.P., leur demandant de prendre les arrangements
financiers nécessaires pour verser à la société, au plus tard le 11 avril 2001, le
paiement intégral du solde dû de 309 151,14 $CA. CIBC a également informé les
clients que, s’ils ne fournissaient pas ledit paiement, CIBC allait exercer ses droits à
l’égard du compte de K.P. qui garantissait leur compte.

#134 CIBC a vendu les positions de K.P. pour couvrir le solde à payer par A.P. et B.P.,
tel que le confirme la lettre envoyée par CIBC le 27 avril 2001.



[71] Pour ce qui concerne les chefs 20 à 23, le lecteur aura avantage à se rapporter
non seulement aux détails #112 à #134 ci-haut reproduits, mais aux détails #99 à #111
reproduits en rapport avec le chef d’infraction 19.

[72] On constate au détail #108 que K.P. avait un intérêt financier dans le compte de
A.P. et B.P. et vice-versa. Or les détails #112, #115, #119 et #123 établissent que dans
les mises à jour du profil de la cliente K.P. effectuées les 19 juillet 1993, 31 juillet 1996,
1er octobre 1997 et 5 juin 1998, l’intimé a omis d’indiquer que A.P. et B.P. possédaient
un intérêt financier dans le compte. L’intimé est donc coupable du chef 20, pour les
mêmes motifs que ceux exprimés en regard du chef d’infraction 8.

[73] Dans les mises à jour du compte de A.P. et B.P. effectuées les 3 septembre
1996, 1er octobre 1997, 11 février 1998 et 5 juin 1998 (détails #116, #119, #120 et
#123), l’intimé a omis d’indiquer que K.P. possédait un intérêt financier dans leur
compte. L’intimé est donc coupable du chef 21, encore une fois pour les mêmes motifs
que ceux exprimés à l’égard du chef 8.

[74] Le chef 22 reproche à l’intimé une conduite inconvenante en contravention avec
l’article 1 du Statut 29 en ayant obtenu le 25 juin 1998 par un faux semblant, la
signature de R.P. pour une attestation de garantie de compte donnée par K.P. en
faveur du compte de A.P. et B.P. en donnant la fausse promesse que la garantie serait
révoquée.

[75] Les détails #124 et #125 établissent les faits à l’origine de ce chef d’infraction et,
pour les mêmes motifs que ceux exprimés au chef 7, l’intimé est coupable du chef 22.

[76] Enfin, le chef 23 reproche à l’intimé une conduite inconvenante en ayant obtenu
le 31 mars 1999, par faux semblant, la signature de K.P. pour une attestation de
convention de garantie en faveur du compte de A.P. et B.P. Le détail #126 établit la
conduite inconvenante de l’intimé eu égard à ce chef.
                                                                                PAGE : 33

[80] Dans sa plaidoirie, l’intimé a fait valoir certains facteurs (par exemple sa
collaboration à l’enquête, son absence d’intention malhonnête, l’accord de ses clients
pour qu’il effectue des transactions discrétionnaires etc.) qui ont ou pourraient avoir une
pertinence en matière de sanction mais qui n’ont pas pour effet, malheureusement pour
l’intimé, de contrer sa culpabilité aux chefs d’infraction dont il fait l’objet. En temps et
lieu, lorsque viendra le moment de décider de la sanction, les différents éléments qu’il a
invoqués feront partie de l’ensemble des circonstances que le Comité devra analyser.

PAR CES MOTIFS, LE COMITÉ :
[81]   DÉCLARE l’intimé coupable de tous les chefs d’infraction.

[82] FIXE au 21 mai 2004 la date où l’Association et l’intimé pourront présenter leurs
représentations sur la sanction;

[83]   CONVOQUE l’Association et l’intimé à une audience à cette fin le 21 mai 2004.




Le 16 avril                 2004      (S) Jean Élie
                                      Jean Élie, membre




Le 16 avril                 2004      (S) Yvan Naud
                                      Yvan Naud, membre



Le 16 avril                 2004      (S) Jean-Pierre Lussier
                                      Me Jean-Pierre Lussier, membre du public et
                                      président du Comité

COPIE CERTIFIÉE CONFORME




Jean-Pierre Lussier
 Member Detail




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What's New
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                                                                                                                           Last Updated: Monday September 3, 2007
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Investors                                  Member Detail
Media, Events,
Speeches                                                                                                                                            Print-Friendly
Membership
Regulatory Policy                          Company:                                  CIBC Investor Services Inc.
Registration
Resources For                              Address:                                 800 Bay Street, 2nd Floor
                                                                                    Toronto ON M5S 3A9
Members
Rule Book
                                           Telephone:                               (416) 351-4343
& Bulletins
Investment Industry                        Fax:                                     (416) 351-2852
Association Of Canada                                                               www.investorsedge.cibc.com


                                           Lines of Business:                       Discount Brokerage


                                           Senior Management:

                                                          Judy Crawford                                Vice President, Customer Contact Centres
                                                                                                       and Support Services, Investor Services
                                                                                                       Inc.
                                                          Wayne Ralph                                  Executive Director, Investor Services Inc.
                                                          Thomas S. Monahan                            Chair, Chief Executive Officer


                                                                           Please contact Member directly for additional information.




 http://www.ida.ca/Membership/MembDetail_en.asp?OrgID=962 (1 of 3)03/09/2007 7:39:38 PM
 Member Detail




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What's New
About The IDA
Compliance                         You Are Here: Membership > Member Detail
Enforcement
                                                                                                                           Last Updated: Monday September 3, 2007
Industry Issues & Info
Investors                                  Member Detail
Media, Events,
Speeches                                                                                                                                          Print-Friendly
Membership
Regulatory Policy                          Company:                                  CIBC World Markets Inc.
Registration
Resources For                              Address:                                 161 Bay Street, BCE Place
                                                                                    PO Box 500
Members
                                                                                    Toronto ON M5J 2S8
Rule Book
& Bulletins                                Telephone:                               (416) 594-7000
Investment Industry
                                           Fax:                                     (416) 214-8669
Association Of Canada
                                                                                    www.cibcwm.com


                                           Lines of Business:                       Equities
                                                                                    Financial Planning
                                                                                    Fixed Income
                                                                                    Futures & Options Trading
                                                                                    Government & Corporate Finance
                                                                                    Institutional Sales & Trading
                                                                                    Insurance Services
                                                                                    Investment Banking
                                                                                    Mergers and Acquisitions
                                                                                    Portfolio Investment Management
                                                                                    Research
                                                                                    Retail Services


                                           Senior Management:

                                                          Steven R. McGirr                             Deputy Chairman & Managing Director
                                                          Thomas S. Monahan                            Managing Director
                                                          Brian Shaw                                   President & Chief Executive Officer
                                                          Richard Venn                                 Deputy Chairman & Managing Director


                                                                           Please contact Member directly for additional information.




 http://www.ida.ca/Membership/MembDetail_en.asp?OrgID=871 (1 of 3)03/09/2007 7:40:02 PM
 Retail Sales Committee




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What's New
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Enforcement
                                                                                                                            Last Updated: Monday September 3, 2007
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Media, Events,
Speeches                                    Mandate
Membership
                                            The mandate of the Retail Sales Committee (the RSC) is to provide Members and/or the Board with advice
Regulatory Policy                           and advocacy on policy issues pertaining to the retail business of the securities industry. Such policy issues
Registration                                include: recommendations on education and training proficiency standards (to raise the competence of
Resources For                               Members and their Approved Persons, resulting in higher industry standards which are in the public
Members                                     interest); and consideration of the impact of regulation and trends on retail business activities.

Rule Book                                   Authority
& Bulletins
                                            The RSC reports to the IDA's Board of Directors.
Investment Industry
Association Of Canada                       Composition

                                            Members include senior retail staff from various sized firms, with broad geographic representation. All
                                            members of the RSC are voting members, including ex-officio members. However, any Member firm or
                                            organization is limited to one vote.

                                            Membership Terms:

                                            The Chair and Vice-chair are appointed by the Committee for a 1 year term. Both appointments are
                                            renewable, by decision of the Committee, to a maximum of a 2 year term. Should the Chair resign the
                                            position, the Vice-chair becomes RSC Chair, for the remainder of the Chair's term.

                                            Membership on the RSC is voluntary. There is no membership term. Any Member firm that offers retail
                                            services may have a representative on the RSC. However, this may be reconsidered by the Committee
                                            should the number of RSC members exceed 30.

                                            Ex-officio Members of the Committee:

                                                   q   Chairs struck by the Committee;
                                                   q   Chair of the Education & Proficiency Committee;
                                                   q   Chair of the Compliance & Legal Section;
                                                   q   Chair of the Discount Brokerage Committee;
                                                   q   President of the Canadian Securities Institute; and



                                            Meeting Schedule:
                                            The RSC will meet on the second Thursday of each month at 4:00 p.m. (EST), or as decided by the Chair
                                            with the Committee's agreement.

                                            Members




 http://www.ida.ca/About/Organization/Committees/RetailSales_en.asp (1 of 3)03/09/2007 10:36:38 PM
 IN THE MATTER OF A DISCIPLINE HEARING PURSUANT TO BY-LAW 20
      OF THE INVESTMENT DEALERS ASSOCIATION OF CANADA

                            Quebec District Council

                             RE: HARRY MIGIRDIC

                             NOTICE OF HEARING

NOTICE is hereby given that a hearing will be held before the Quebec District
Council («the District Council») of the Investment Dealers Association («the
Association»), on February 4, 2004, at 1, Place Ville-Marie, Suite 2802, Montreal
(Quebec), at 9:30 AM, or as so soon thereafter as the hearing can be held,
concerning a disciplinary action brought by the Association Staff concerning
Harry Migirdic («the Respondent»).

NOTICE is further given that the staff of the Association alleges the following
violations of the By-laws, Regulations or Policies of the Association by the
Respondent being at all relevant time a Registered Representative employed
with the Member firm, CIBC World Market inc. («CIBC»):

Count 1

Between September 2000 and February 2001, inclusive, the Respondent, while a
Registered Representative of CIBC, a Member of the Association, effected
approximately 105 discretionary trades in the client account of J.P., without the
prior knowledge or written authorization of the client and without such client
account having been specifically approved and accepted in writing as a
discretionary account by the designated person of the Member CIBC, contrary to
Association Regulation 1300.4.

Count 2

Between September 2000 and February 2001, inclusive, the Respondent, while a
Registered Representative of CIBC, a Member of the Association, traded in a
discretionary manner in the client account of J.M., without the prior knowledge or
written authorization of the client and without such client account having been
specifically approved and accepted in writing as a discretionary account by the
designated person of the Member CIBC, contrary to Association Regulation
1300.4.

Count 3

On or around May 8, 2000, the Respondent engaged in conduct unbecoming and
detrimental to the public interest by modifying the investment objectives, the risk
factors and the total net worth on an update of the Know Your Client form
regarding the account of P.A., without the knowledge and consent of the latter,
contrary to By-law 29.1 of the Association.
                                                                                  2


Count 4

Between December 2000 and February 2001, inclusive, the Respondent, while a
Registered Representative of CIBC, a Member of the Association, traded in a
discretionary manner in the client account of P.A., without the prior knowledge or
written authorization of the client and without such client account having been
specifically approved and accepted in writing as a discretionary account by the
designated person of the Member CIBC, contrary to Association Regulation
1300.4.

Count 5

On or around May 14, 2000, the Respondent failed to observe high standards of
ethics and conduct and engaged in conduct unbecoming and detrimental to the
public interest by assuming responsibility of the decline of his client P.A.’s
portfolio and by making an offer to compensate him for losses he could incurred
between January 2000 and January 2001, with such offer being made without
the knowledge, consent or authorization of CIBC, contrary to By-law 29.1, of the
Association and to Standard C of the Code of Ethics and Standards of Conduct.

Count 6

On or around July 1, 2000, the Respondent failed to observe high standards of
ethics and conduct and engaged in conduct unbecoming and detrimental to the
public interest by giving a promissory note in the amount of $400,000 to
compensate his client P.A. for losses he incurred in his account, without the
knowledge, consent or authorization of CIBC, contrary to By-law 29.1, of the
Association and to Standard C of the Code of Ethics and Standards of Conduct.

Count 7

On or around February 16, 1993, the Respondent engaged in conduct
unbecoming a registered representative contrary to By-law 29.1 of the
Association, in that he obtained the signature of H.M. for an account guarantee
agreement in favour of the account of R.L., under false pretence.

Count 8

On or around July 21, 1995, July 31, 1996, July 21, 1997 and August 18, 1997,
the Respondent engaged in conduct unbecoming a registered representative,
contrary to By-law 29.1 of the Association, in that he failed to indicate on updates
of Know Your Client forms, regarding the account of R.L., that H.M. and A.M.’s
account was guaranteeing the account of R.L.
                                                                                  3


Count 9

On or around October 3, 1997 and August 2, 1999, the Respondent engaged in
conduct unbecoming a registered representative, contrary to By-law 29.1 of the
Association, in that he failed to indicate on updates of Know Your Client forms,
regarding the account of H.M. and A.M., that R.L. had a financial interest in their
account, since the latter was guaranteeing R.L.’s account.

Count 10

On or around April 25, 2000, the Respondent engaged in conduct unbecoming a
registered representative contrary to By-law 29.1 of the Association, in that he
obtained the signature of H.M. for an acknowledgement of a guarantee
agreement in favour of the account of R.L., under false pretence.

Count 11

On or around February 16, 2001, the Respondent, while a registered
representative of CIBC, effected a discretionary trade in the account of H.M.,
without the prior knowledge or written authorization of the client and without such
client’s account having been specifically approved and accepted in writing as a
discretionary account by the designated person of the Member CIBC, contrary to
Association Regulation 1300.4.

Count 12

On or around February 16, 2001, the Respondent, while a registered
representative of CIBC, effected a discretionary trade in the account of A.M.,
without the prior knowledge or written authorization of the client and without such
client’s account having been specifically approved and accepted in writing as a
discretionary account by the designated person of the Member CIBC, contrary to
Association Regulation 1300.4.

Count 13

On or around March 28, 1994, the Respondent engaged in conduct unbecoming
a registered representative contrary to By-law 29.1 of the Association, in that he
obtained the signature of H.M. in his quality of principal shareholder of X inc. for
an account guarantee agreement in favour of the account of S.G., under false
pretence.

Count 14

On or around October 31, 1995, October 17, 1996, October 15, 1997,
October 19, 1998 and October 20, 1999, the Respondent engaged in conduct
unbecoming a registered representative contrary to By-law 29.1 of the
Association, in that he obtained the signature of H.M. as a principal shareholder
                                                                                  4


of X inc. for an acknowledgement of a guarantee agreement in favour of the
account of S.G., under false pretence.

Count 15

On or around March 13, 1997, September 30, 1997 and May 21, 1998, the
Respondent engaged in conduct unbecoming a registered representative
contrary to By-law 29.1 of the Association, in that he failed to indicate on updates
of Know Your Client forms, regarding the account of S.G., that X inc.’s account
was guaranteeing the account of S.G.

Count 16

On or around September 18, 1995, September 30, 1997 and May 21, 1998, the
Respondent engaged in conduct unbecoming a registered representative,
contrary to By-law 29.1 of the Association, in that he did not indicate on updates
of Know Your Client forms, regarding the account of X inc., that S.G. had a
financial interest in its account, since X inc.’s account was guaranteeing S.G.’s
account.

Count 17

On or around May 21, 1998, the Respondent engaged in conduct unbecoming
and detrimental to the public interest by increasing to «100% high» the risk
tolerance indicated on the update of the Know Your Client form of X inc., without
the knowledge and consent of the latter, contrary to By-law 29.1 of the
Association.

Count 18

On or around July 24, 1996, the Respondent engaged in conduct unbecoming a
registered representative contrary to By-law 29.1 of the Association, in that he
obtained the signature of L.N. for an account guarantee agreement in favour of
the account of S.G., under false pretence.

Count 19

On or around June 3, 1993, the Respondent engaged in conduct unbecoming a
registered representative contrary to By-law 29.1 of the Association, in that he
obtained the signature of K.P. for an account guarantee agreement in favour of
the account of A.P. and B.P., under false pretence.

Count 20

On or around July 19, 1993, July 31, 1996, October 1, 1997, June 5, 1998 and
July 13, 2000, the Respondent engaged in conduct unbecoming a registered
representative, contrary to By-law 29.1 of the Association, in that he did not
indicate on updates of Know Your Client forms, regarding the account of K.P.,
                                                                                  5


that A.P. and B.P. had a financial interest in the account of K.P., since the latter
was guaranteeing A.P. and B.P.’s account.

Count 21

On or around September 3, 1996, October 1, 1997, February 11, 1998 and June
5, 1998, the Respondent engaged in conduct unbecoming a registered
representative contrary to By-law 29.1 of the Association, in that he did not
indicate on updates of Know Your Client forms, regarding the account of A.P.
and B.P., that K.P.’s account was guaranteeing the account of A.P. and B.P.

Count 22

On or around June 25, 1998, the Respondent engaged in conduct unbecoming a
registered representative contrary to By-law 29.1 of the Association, in that he
obtained the signature of R.P. for an acknowledgment of a guarantee agreement
given by K.P. in favour of the account of A.P. and B.P., under false pretence and
under the false promise that the guarantee would be revoked.

Count 23

On or around March 31, 1999, the Respondent engaged in conduct unbecoming
a registered representative contrary to By-law 29.1 of the Association, in that he
obtained the signature of K.P. for an acknowledgement of a guarantee
agreement in favour of the account of A.P. and B.P., under false pretence.

Count 24

In or around September 1997, the Respondent engaged in conduct unbecoming
and detrimental to the public interest, contrary to By-law 29.1 of the Association,
by accepting a forged power of attorney for the account of Y Ltd., knowing that
the said power of attorney had not been signed by the beneficial owner of the
account.
                                                                              6


                                PARTICULARS

NOTICE is further given that the following is a summary of the facts alleged and
intended to be relied upon by the Association at the said hearing:

1.   The Association initiated an investigation into the conduct of the
     Respondent following allegations of discretionary trading and conduct
     unbecoming contained in the Uniform Termination Notice («UTN») of the
     Respondent filed on April 16, 2001, by CIBC World Markets inc. («CIBC»), a
     Member of the Association;



a)   The Respondent

2.   The Respondent, Harry Migirdic, was first registered as a Registered
     Representative on or around March 21, 1980;

3.   He changed his name from Migirdicoglu to Migirdic in January 1984;

4.   He was named vice-president of Merrill Lynch on or around October 21,
     1986;

5.   The Respondent was transferred to the Member firm Wood Gundy, now
     CIBC, branch of 600, De Maisonneuve, Montreal, on or around, January 15,
     1990;

6.   The Respondent was terminated on or around April 5, 2001;

7.   Since being fired by CIBC, the Respondent has not been employed with any
     Member firm and has not been an approved person with the Association;

8.   On or around August 22, 2002, the Quebec District Counsel refused the
     application of the Respondent for approval as a registered representative
     because such approval was not in the public interest, pursuant to By-law
     20.4 of the Association. The Respondent did not appeal of the decision;



b)   Introduction

9.   Before being dismissed, the Respondent have been subject to several
     internal disciplinary measures by CIBC notably for having forged a power of
     attorney and for having effected discretionary trades in clients’ accounts.
     For those violations, the Respondent was fined by CIBC;
                                                                             7


10. On or around January 23, 2001, the Respondent signed a promissory note
    in favour of CIBC for the aggregate of various losses in clients’ accounts
    which amounted to $335,663.23. The debt was to be repaid by deducting
    $10,000 per month from his net payout before tax;

11. On or around February 20, 2001, the Respondent left the office for sick
    leave and one week later, he told CIBC that he had problems with several
    accounts;

12. On or around February 26, 2001, the Respondent sent an e-mail to his
    supervisor, Thomas Noonan, in which he listed «the accounts that are in
    trouble». The Respondent admitted having violated the Association By-laws
    and Regulations by giving short comments regarding each of these
    accounts;

13. As it appears from the UTN that followed the Respondent’s dismissal on
    April 5, 2001, more than twenty (20) clients complained to CIBC about the
    Respondent’s misconduct regarding suitability, discretionary trading,
    account performance, repudiating client documents, losses in account,
    margin deficiency;

14. Some of the complainants are now suing before civil courts the Respondent
    and CIBC for damages. The amounts claimed totalize approximately
    $5,000,000 for losses incurred in their accounts and approximately
    $55,000,000 for punitive damages. No trial has been held yet and therefore
    no judgment has been rendered in the civil files;

15. Other complainants have settled out of court their claims with CIBC;



c)   Counts

     i)   Account of J.P. – Discretionary trading

     Count 1

16. On or around August 24, 2000, J.P. opened the account number 500-21169
    at CIBC with the Respondent as her investment advisor;

17. At the time of opening the account, J.P. was 68 years old with an estimated
    annual income of $24,000 and a total net worth of approximately $300,000.
    According to the Know Your Client form («KYC»), the client’s investment
    objectives were 50% short term capital gains and 50% long term capital
    gains. Her risk factors were noted as 50% low risk and 50% high risk. Her
    investment knowledge was noted on the KYC as «good»;
                                                                                 8


18. A KYC update was prepared on or around October 24, 2000, two months
    after the opening of the account, and the risk factors were changed to 50%
    medium risk and 50% high risk;

19. Notwithstanding that J.P.’s account was not a discretionary account, the
    Respondent proceeded to make purchases and sales of securities without
    consulting J.P. at the timing of the trade or as to the specific security to be
    bought, quantity or price;

20. From September 6, 2000 to February 2001, a total of approximately 105
    trades were made in the account;

21. All the trades executed in the account of J.P. were executed on a
    discretionary basis;

22. J.P.’s account had not been accepted by CIBC as a discretionary account
    pursuant to Association Regulation 1300.4;

23. Besides, CIBC brought back J.P.’s accounts to their original status based on
    her account profile and compensated her for the losses that she suffered.
    First, CIBC gave her $97,400 which represented the return of capital to her
    account 500-21169 plus interests. Second, CIBC credited $112,000 J.P.’s
    RRIF account 553-19545. This amount was also representing the return of
    capital to the account plus interests. CIBC made this offer to J.P. because
    the account was concentrated in two higher risk securities, which were not
    appropriate for a RRIF;



     ii)   Account of J.M. – Discretionary trading

     Count 2

24. On or around September 9, 2000, J.M. opened the account number
    310-28106 at CIBC with the Respondent as his investment advisor;

25. At the time of opening the account, J.M. was 80 years old with an estimated
    annual income of $35,000 and a total net worth of approximately $375,000.
    According to the KYC, the client’s investment objectives were 100% long
    term capital gains. His risk factors were noted as 45% low risk, 45%
    medium risk and 10% high risk. His investment knowledge was noted on
    the KYC as «excellent»;

26. Notwithstanding that J.M.’s account was not a discretionary account, the
    Respondent proceeded to make purchases and sales of securities without
    consulting J.M. at the timing of the trade or as to the specific security to be
    bought, quantity or price;
                                                                            9


27. J.M. complained to CIBC about the fact that the Respondent was carrying
    out transactions without his approval or consultation and that on numerous
    occasions, he expressed his total disagreement with purchases;

28. From September 2000 to February 2001, a total of approximately 35 trades
    were made in the account;

29. J.M.’s account had not been accepted by CIBC as a discretionary account
    pursuant to Association Regulation 1300.4;

30. Besides, CIBC compensated J.M. for the losses that he suffered. Indeed,
    they settled for an amount of $69,897.72;



    iii)   Account of P.A. – Discretionary trading and Conduct unbecoming

31. P.A. had the account number 500-08860 at CIBC with the Respondent as
    his investment advisor;

32. According to an update of the KYC dated November 4, 1994, P.A. was at
    the time 65 years old with an estimated annual income of $100,000 and a
    total net worth of approximately $250,000.       The client’s investment
    objectives were 50% income, and 50% medium term capital gains. His risk
    factor was noted as 100% low risk. His investment knowledge was noted
    on the KYC update as «fair»;

33. A KYC update was prepared on or around September 1, 1995, and the risk
    factors were changed to 70% low risk, 10% medium risk and 20% high risk.
    The total net worth was evaluated at $600,000;

34. Another KYC update, dated March 18, 1997, changed again the risk factors
    to 30% low risk, 20% medium risk and 50% high risk. The total net worth
    was evaluated at $1,000,000 and the investment knowledge was described
    as «excellent»;



    Count 3

35. Finally, an update of the KYC was made on or around May 8, 2000, on
    which P.A.’s investment objectives were changed to 40% income, 20%
    short term, 30% medium and 10% long term. The risk factors were also
    changed to 10% low, 10% medium and 80% high. The total net worth was
    then evaluated at $1,800,000;
                                                                                  10


36. The Respondent did not inform P.A. about the changes that he brought on
    the KYC update of May 2000. P.A. did not know that his KYC was updated
    in May 2000 and accordingly, he never consented or agreed with those
    changes;



     Count 4

37. Notwithstanding that P.A.’s account was not a discretionary account, the
    Respondent proceeded to make purchases and sales of securities without
    consulting P.A. at the timing of the trade or as to the specific security to be
    bought, quantity or price;

38. All the American transactions executed in P.A.’s account were discretionary
    except for two stocks;

39. From March 1994 to February 2001, a total of approximately 1400 trades
    were made in the account of P.A. During the year 2000, approximately 360
    trades were made in the account;

40. P.A.’s account had not been accepted by CIBC as a discretionary account
    pursuant to Association Regulation 1300.4;



     Count 5

41. Moreover, between December 1999 and June 2000, P.A.’s portfolio suffered
    a loss of approximately 50%. On or around December 31, 1999, the value
    of the portfolio was $1,059,954.82 and on or around June 30, 2000, it was
    $471,519,21;

42. P.A. complained to the Respondent about his losses. In response to his
    complaints, on or around May 14, 2000, the Respondent gave to his client a
    letter in which he said that he assumed the responsibility of the decline of
    the portfolio and undertook to appreciate the portfolio value back to the
    value held on January 2000 which was $1,059,954 prior to the expiration of
    the third Friday of January 2001. Furthermore, the Respondent wrote that
    in the case of his inability to bring the portfolio to the January 2000 level, he
    would reimburse the account holder the discrepancy between January 2000
    value and January 2001 value;

43. The Respondent made this offer to P.A. without the knowledge, consent or
    authorization of CIBC;
                                                                                11


     Count 6

44. Still unsatisfied, P.A. sent a letter to the Respondent asking him to cease all
    trading in his account and to reimburse him for his losses;

45. Following the reception of the letter of P.A., on or around July 1, 2000, the
    Respondent offered and gave to his client P.A. a promissory note for the
    amount of $400,000;

46. With this promissory note, the Respondent gave to P.A. a photocopy of a
    bond in the amount of $300,000 as a guarantee;

47. The Respondent did not inform CIBC that he gave to P.A. a promissory note
    because he was hoping that the markets would turn around and that he
    would not have to reimburse P.A.;

48. Regarding the account of P.A., the Respondent wrote in his February 26,
    2001 e-mail the following: «50008860 Discretionary trades in options loss in
    account 900m»;

49. In March 2001, P.A. was informed by CIBC that the Respondent had
    requested a leave of absence for health reasons;

50. On or around March 29, 2001, CIBC sent a letter to P.A. requesting to
    rectify the margin deficiency of $111,158 by liquidating positions and by
    bringing further money or securities to the account. Moreover, CIBC
    indicated that, failing of transfer of money or securities or appropriate
    instructions of liquidation before the close of the markets of March 29, 2001,
    the account would be liquidated at 9:30 the morning after;

51. P.A. refused to give instructions to CIBC to liquidate his positions to cover
    the account deficiency and CIBC confirmed by letter to P.A. that they
    liquidated them, starting March 30, 2001;



     iv)   Account of H.M. and          A.M.   –   Conduct    unbecoming      and
           Discretionary trading

52. The Respondent knows H.M. and A.M. since the beginning of the eighties;

53. On or around October 7, 1986, H.M. and A.M. opened a joint account
    number 500-01327 at Merrill Lynch with the Respondent as their investment
    advisor;

54. At the time of opening the account, H.M. was 53 years old and his wife A.M.
    was 49 years old;
                                                                                               12


55. A KYC form and two (2) KYC updates were filled in for the account of H.M.
    and A.M. by the Respondent as follows:


        Date                  Oct. 7, 1986             Oct. 3, 1997         Aug. 2, 1999
        Investment objectives Income                   100% long term       100% long term
                              Growth
        Risk Factor           Good quality             50% medium           50% medium
                              Speculative              50% high             50% high
        Annual income         $50,000                  $100,000             $100,000
        Total Net Worth       $250,000                 $1,000,000           $2,000,000
        Investment                                     Good                 Good
        knowledge



56. In 1988, R.L. had the account number 500-01193 opened at Merrill Lynch
    with an investment dealer as her investment advisor who was not the
    Respondent;

57. The Respondent became R.L.’s investment advisor afterwards;

58. Seven (7) updates of the KYC form were filled in for the account of R.L. by
    the Respondent as follows:

 Date          March 25,   July 22, 92   July 21, 95     July 31, 96    July 21, 97/ Aug. 5, 99
               1991                                                     Aug. 18, 97
 Investment 25% growth     20%           10%             50% short      50% short    50% short
 objectives 50% growth     income        income          50% long       50% long     50% long
            with risk      70% short     70% short
            25% venture    10% long      20% long
            situations
 Risk                      50% low       30%             30%            100% high    100% high
 Factor                    50%           medium          medium
                           medium        70% high        70% high
 Annual        $40,000     $40,000       $40,000         $40,000        $40,000      $40,000
 Income
 Total Net $400,000        $400,000      $400,000        $400,000       $400,000     $800,000
 Worth
 Investment Good           Good          Good            Good           Good         Good
 knowledge
                                                                               13


59. Regarding the account of H.M. and A.M. and the account of R.L., the
    Respondent wrote in his February 26, 2001 e-mail the following:
    «50001327 guarantees 50001193 since 1995 unaware of the guarantee dr
    in 50001193 320m+150 their $»;



     Count 7

60. In February 1993, R.L. wanted to take out money from her CIBC account
    but she had suffered losses in the said account;

61. To assure R.L. to take out money from her account, on or around
    February 16, 1993, the Respondent had H.M. sign a Guarantee Agreement
    in favour of R.L.;

62. H.M. and A.M. did not know R.L. and they were not aware of the document
    that H.M. signed. They did not know the consequences of guaranteeing
    R.L.’s account. They had no reason to guarantee R.L.’s account, the
    account of somebody that they did not know;

63. The Respondent obtained H.M.’s signature under the false pretence that it
    was required for account maintenance;



     Count 8

64. On or around July 21, 1995, July 31, 1996, July 21, 1997 and August 18,
    1997, while updating the KYC form for the account of R.L., the Respondent
    failed to indicate on R.L.’s KYC that H.M. and A.M.’s account was
    guaranteeing her account;



     Count 9

65. On or around October 3, 1997 and August 2, 1999, while updating the KYC
    forms for the account of H.M. and A.M., the Respondent failed to indicate on
    H.M. and A.M.’s KYC updates, that R.L. had a financial interest in H.M. and
    A.M.’s account, since the latter was guaranteeing R.L.’s account;



     Count 10

66. On or around April 25, 2000, the Respondent had H.M. sign a confirmation
    letter of the guarantee in favour of the account of R.L. under false pretence;
                                                                               14


     Counts 11 and 12

67. On or around February 16, 2001, while left for a trip abroad, 11,300 shares
    of Intergold Ltd. were purchased at a cost of $22,587.50 in the RRSP
    account number 550-41038 of A.M. without her authorization;

68. Similarly, on or around February 16, 2001, while left for a trip abroad,
    11,000 Intergold Ltd. shares were purchased for the RRSP account number
    550-41039 of H.M. at a cost of $21,990.50 without his authorization;

69. CIBC cancelled the February 16, 2001 Intergold transactions and reinstated
    the RRSP accounts accordingly, following a complaint from H.M. and A.M.;

70. Notwithstanding that H.M. and A.M.’s RRSP accounts were not
    discretionary accounts, the Respondent proceeded to make purchases of
    Intergold shares without consulting his clients;

71. H.M. and A.M.’s accounts had not been accepted by CIBC as discretionary
    accounts pursuant to Association Regulation 1300.4;

72. At the beginning of March 2001, H.M. and A.M. were informed by CIBC that
    the Respondent had requested a leave of absence for health reasons;

73. On or around March 16, 2001, H.M. and A.M. sent a letter to CIBC
    requesting that no transactions should be made in any of their accounts
    without their prior written authorization. H.M. and A.M. had also learned that
    they were guaranteeing the account of R.L.;

74. On or around June 19, 2001, CIBC sent a letter to R.L. with conform copy to
    H.M. and A.M., requesting her to make necessary financial arrangements to
    provide the firm with payment in full of the balance owing of
    $356,824.91CDN by June 26, 2001. Failing that, CIBC advised that they
    would proceed to exercise their rights with respect of H.M. and A.M.’s
    account which guaranteed R.L.’s account;

75. CIBC actually sold H.M. and A.M.’s positions to cover the balance owed by
    R.L.;



     v)   Account of X inc. – Conduct unbecoming

76. S.G. had an account opened at Merrill Lynch in November 1983 with the
    Respondent as his investment advisor. The address given on the New
    Account Application form was at Place Bonaventure, no social insurance
    number was given and nobody appeared to have a financial interest or
    authority in the account;
                                                                                               15


77. S.G. is the Respondent’s uncle who lived in Turkey;

78. S.G. is now 73 years old;

79. A KYC form and seven (7) KYC updates were filled in by the Respondent as
    follows:


Date          Nov. 24,   Nov. 7, 85 May 7, 92 Mar. 13,       Sept. 30,     May 21,     Jun. 10, 99
              83                    / Feb. 10, 97            97            98
                                    94
Investment    Income     Income     100%         80% short   80% short     80% short   80% short
objectives                          short        10%         10%           10%         10%
                                                 medium      medium        medium      medium
                                                 10% long    10% long      10% long    10% long
Risk Factor   Good       Specula-   100%         10% low     50%           100%        100% high
              Quality    tive       high         10%         medium        high
                                                 medium      50% high
                                                 80% high
Annual        $20,000    $50,000    $100,000     $100,000    $100,000      $100,000    $100,000
income
Total Net     $100,000 $200,000     $250,000     $300,000    $500,000      $500,000    $1,000,000
Worth
Investment                          Excellent    Excellent   Excellent     Excellent   Excellent
knowledge



80. On or around November 15, 1993, H.M. and Arek M. opened the account
    number 500-00204 in the name of X inc., their holding company, at CIBC
    with the Respondent as their investment advisor;

81. A KYC form and three (3) KYC updates were filled in for X inc. by the
    Respondent as follows:

       Date                   Nov. 15, 1993 Sept. 18,          Sept. 30,          May 21, 1998
                                            1995               1997
       Investment objectives 80% income    80% income    80% income    80% income
                             20% long term 20% long term 20% long term 20% long term
       Risk Factor            100% low          50% low        50% low            100% high
                                                50% medium     50% medium
       Total Net Worth        $1,000,000        $1,000,000     $1,000,000         $1,000,000
       Investment             Excellent         Excellent      Excellent          Excellent
       knowledge
                                                                           16


82. Regarding the account of X inc. and S.G., the Respondent wrote in his
    February 26, 2001 e-mail the following: «50000204 guarantees 31006094
    since 1995 unaware of the guarantee dr in 31006094 1mm»;



    Count 13

83. On or around March 28, 1994, the Respondent had H.M., in the name of
    X inc., sign a Guarantee Agreement in favour of S.G.;

84. H.M. did not know S.G. and he was not aware of the consequences of
    guaranteeing S.G.’s account. He had no reason for X inc. to guarantee
    S.G.’s account, the account of somebody that he did not know;

85. The Respondent obtained the H.M.’s signature under the false pretence that
    it was required for account maintenance;



    Count 14

86. On or around October 31, 1995, October 17, 1996, October 15, 1997,
    October 19, 1998 and October 20, 1999, the Respondent obtained the
    signature of H.M. as a principal shareholder of X inc. for an
    acknowledgement of a guarantee agreement in favour of the account of
    S.G., under false pretence;



    Counts 15, 16, 17

87. On or around September 18, 1995, the Respondent modified the risk factors
    listed on the KYC of X inc. for 50% low risk and 50% medium risk.
    Moreover, the Respondent failed to indicate on the KYC update that S.G.
    had a financial interest in the account since X inc.’s account was
    guaranteeing S.G.’s account;

88. A KYC update dated March 13, 1997 for S.G.’s account showed that to the
    question «Does any other person including the financial consultant: - Have
    authority over this account? - Have a financial interest in this account?
    - Guarantee this account?», the name of P.G. is given. The Respondent
    failed to indicate on the KYC update that X inc. was guaranteeing the
    account of S.G;

89. An update of the KYC of S.G.’s account dated September 30, 1997,
    changed the risk factors to 50% medium and 50% high and the total net
    worth was $500,000. The KYC update indicated to the question «Does any
                                                                               17


     other person including the financial consultant: - Have authority over this
     account? - Have a financial interest in this account? - Guarantee this
     account?», the name of P.G. is given. The Respondent failed to indicate on
     the KYC update that X inc. was guaranteeing the account of S.G.;

90. On or around the same day, September 30, 1997, a KYC update form was
    filled in by the Respondent for the account of X inc. but nothing was
    changed from the last version of 1995. The investment objectives were still
    80% income and 20% long term. The risk factors were 50% low risk and
    50% medium risk. The total net worth was evaluated at $1,000,000. The
    Respondent did not indicate on the KYC update that S.G.’s account was
    guaranteed by the X inc.’s account;

91. On or around May 21, 1998, an update of the KYC of X inc. was prepared
    and the risk tolerance was from then 100% high. The Respondent
    amended the KYC for X inc.’s account without the knowledge or consent of
    his client;

92. The same day, on or around May 21, 1998, S.G.’s KYC was updated. His
    risk tolerance was also from then 100% high.

93. On both May 21, 1998 updates of X inc.’s and S.G.’s KYC, the Respondent
    failed to indicate that X inc.’s account was guaranteeing the account of S.G.;

94. On or around June 10, 1999, S.G.’s KYC was amended so to indicate that
    X inc.’s account was guaranteeing the account of S.G. Never before June
    1999, S.G.’s KYC forms were modified to indicated that his account was
    guaranteed by 500-00204 account, the X inc.’s account;

95. On or around March 6, 2001, X inc. was informed by a letter from the
    Respondent’s supervisor, Thomas Noonan, that the Respondent had
    requested a leave of absence for health reasons;

96. On or around March 16, 2001, X inc. sent a letter to CIBC requesting that no
    transactions should be made in its account without its prior written
    authorization;

97. On or around October 24, 2001, CIBC transferred $691,936.30 from the
    X inc.’s account to the account of S.G. by virtue of the guarantee agreement
    leaving a cash balance of $0 in the X inc.’s account. In addition, CIBC
    transferred the same day $11,008.86 from H.M. and A.M.’s account to the
    account of S.G. leaving them a cash balance of $2,54;
                                                                                                  18


     vi)   Account of L.N. – Conduct unbecoming

     Count 18

98. On or around July 24, 1996, the Respondent had L.N. sign a guarantee
    agreement in the name of Z inc. in favour of S.G. under false pretence. This
    guarantee was revoked as soon as August 22, 1996. L.N. did not know
    S.G. and he had no reason to guarantee S.G.’s account;

     vii) Account of K.P. – Conduct unbecoming

99. On or around August 1, 1984, A.P. and B.P. opened a joint account at
    Merrill Lynch with the Respondent;

100. A KYC form and six (6) KYC updates were filled in for the account of A.P.
     and B.P. by the Respondent:

      Date         Aug. 1, 84 July 22,    Sept. 3,    Oct. 1, 97   Feb. 11,    June 5,     April 5, 99
                              92          96                       98          98
      Investment Income       70%       50%       50%       50% short 50% short 50% short
      objectives              income    income    income    50%       50%       50%
                              30% short 50% short 50% short medium    medium    medium
      Risk         Invest-    70%         100%        50%          50%         100%        100%
      Factor       ment       invest-     high        medium       medium      high        high
                   value      ment                    50% high     50% high
                              grade
                              30%
                              specula-
                              tive
      Annual       $100,000   $100,000    $100,000    $100,000     $100,000    $100,000    $100,000
      income
      Total Net    $500,000   $400,000    $400,000    $400,000     $400,000    $400,000    $800,000
      Worth
      Investment              Excellent   Excellent   Excellent    Excellent   Excellent   Excellent
      knowledge



101. On or around December 18, 1984, K.P. opened an account at Merrill Lynch
     with the Respondent as her investment advisor. At the time of opening the
     account, K.P. was 55 years old;

102. K.P. has the same surname as A.P. and B.P. but she is not related to them;

103. A KYC form and six (6) KYC updates were filled in for the account of K.P. by
     the Respondent as follows:
                                                                                                19


      Date          Dec. 18,     April 20, 93   July 19, 93   Oct. 1, 97   June 5, 98   July 13, 00
                    1984                        July 31, 96
      Investment    Income       100%           25%           25%          25%          50% short
      objectives                 income         income        income       income       50% long
                                                25% short     25% short    25% short
                                                25%           25%          25%
                                                medium        medium       medium
                                                25% long      25% long     25% long
      Risk Factor   Investment   50% low        50% low       50%          100% high    20% low
                    value        50%            50% high      medium                    20%
                                 medium                       50% high                  medium
                                                                                        60% high
      Annual        $25,000      $100,000       $100,000      $100,000     $100,000     $100,000
      income
      Total Net     $100,000     $1,500,000     $1,500,000    $1,500,000   $1,500,000   $1,000,000
      Worth
      Investment                 Good           Good          Good         Good         Good
      knowledge



104. K.P.’s son, R.P., had also opened an account at Merrill Lynch with the
     Respondent a couple of days before her. He had the same investment
     objectives and risk factors as his mother’s. His total net worth was
     approximately $250,000 and his annual income was $100,000;

105. On or around April 19, 1993, K.P. who was then 64 years old, signed a
     trading authorization in favour of her son R.P.;

106. An update of the KYC was signed the day after, on or around April 20, 1993,
     in which the investment objective was established at 100% income and the
     risk factors at 50% low risk and 50% medium risk. The estimated total net
     worth was $1,500,000 and the annual income was $100,000. On this form,
     it is written «R.P. (son) will be managing account»;

107. Regarding the account of A.P. and B.P. and the account of K.P., the
     Respondent wrote in his February 26, 2001 e-mail the following:
     «50001555 guarantees 50001628 since 1995 unaware of the guarantee dr
     in 50001628 300m»;



     Count 19

108. On or around June 3, 1993, the Respondent had K.P. sign a Guarantee
     Agreement in favour of A.P. and B.P. The Respondent obtained the
     signature of K.P. under the false pretence that it was required for account
     maintenance;
                                                                               20


109. K.P. did not know A.P. and B.P. She had no reason to guarantee A.P. and
     B.P.’s account, the account of people that she did not know;

110. The Respondent did not inform K.P. that the document signed was to
     guarantee the account of A.P. and B.P. He did not inform her as to the
     consequences of guaranteeing K.P.’s account;

111. Moreover, a guarantee agreement was signed by R.P. in favour of K.P.;



     Counts 20, 21, 22, 23

112. On or around July 19, 1993, the investment objectives indicated on K.P.’s
     KYC were changed for 25% income, 25% short, 25% medium and 25%
     long. The risk factors were also changed for 50% low and 50% high. The
     Respondent failed to indicate on the KYC update that A.P. and B.P. had a
     financial interest in the account since K.P.’s account was guaranteeing their
     account;

113. K.P. appointed her son R.P. as her agent and attorney by signing a «Power
     of Attorney» on or around July 15, 1994;

114. The day after, on or around July 16, 1994, she signed another Wood Gundy
     form to give her son the authorization to sign cheques in her account;

115. Another KYC update for the account of K.P. was filled in on or around July
     31, 1996. No modification was brought to the form;

116. On or around September 3, 1996, while updating the KYC form for the
     account of A.P. and B.P., the Respondent failed to indicate on A.P. and
     B.P.’s KYC, that K.P.’s account was guaranteeing the account of A.P. and
     B.P;

117. On or around October 1, 1997, the risk factors were increased for K.P.’s
     account as it appears from the KYC update. As a matter of fact, they
     changed to 50% medium risk and 50% high risk;

118. The same day, on or around October 1, 1997, the risk factors were
     decreased for A.P. and B.P.’s account to 50% medium risk and 50% high
     risk. Thus, K.P.’s account and A.P. and B.P.’s account had the same
     degree of risk;

119. On both October 1, 1997 updates of A.P. and B.P.’s KYC and K.P.’s KYC,
     the Respondent failed to indicate that K.P.’s account was guaranteeing A.P.
     and B.P.’s account;
                                                                               21


120. On or around February 11, 1998, the investment objectives of A.P. and B.P.
     were changed to 50% short term and 50% medium term. The Respondent
     failed again to indicate on the KYC update that K.P.’s account was
     guaranteeing their account;

121. On or around June 5, 1998, the risk factors were increased again as noted
     in the KYC update for the account of K.P. Indeed, they changed to 100%
     high risk;

122. The same day, on or around June 5, 1998, the risk factors were also
     increased to 100% high risk for the account of A.P. and B.P. Thus, K.P.’s
     account and A.P. and B.P.’s account had the same degree of risk once
     again;

123. On both June 5, 1998 updates of A.P. and B.P.’s KYC and K.P.’s KYC, the
     Respondent failed to indicate that K.P.’s account was guaranteeing A.P.
     and B.P.’s account;

124. On or around June 25, 1998, the Respondent’s supervisor, Thomas
     Noonan, sent a letter to K.P. requesting her confirmation of the guarantee
     agreement in favour of A.P. and B.P.’s account;

125. R.P. signed the name of his mother on this confirmation letter as well as his
     own name under the promise of the Respondent that the guarantee would
     be revoked. There was no follow up on the part of R.P. because he trusted
     the Respondent that he would revoke the guarantee but he never did it;

126. On or around March 31, 1999, another letter from the Respondent’s
     supervisor, Thomas Noonan, was sent to K.P. requesting again her
     confirmation of the guarantee of liability of the account of A.P. and B.P.
     This time, only K.P. signed the confirmation letter. The Respondent had her
     sign the confirmation letter. She had no knowledge or understanding of the
     document being signed and of the consequences of guaranteeing the
     account of A.P. and B.P.;

127. Another KYC update of A.P. and B.P.’s account was filled in on or around
     April 5, 1999. No modification was made except the mention of the account
     500-01555, K.P.’s account, guaranteeing A.P. and B.P.’s account;

128. On or around July 13, 2000, the Respondent failed to indicate on K.P.’s
     KYC update that A.P. and B.P.’s account had a financial interest in her
     account;

129. On or around March 6, 2001, the Respondent’s supervisor, Thomas
     Noonan, sent a letter to R.P. informing him that the Respondent had
     requested a leave of absence for health reasons;
                                                                              22


130. On or around April 1, 2001, R.P. sent a complaint letter to Thomas Noonan
     about the Respondent and CIBC’s conduct;

131. On or around April 2, 2001, at R.P.’s home, the Respondent signed a letter
     already prepared by R.P., in which he confirmed having obtained K.P.’s
     signature on the June 3, 1993 guarantee agreement without informing her of
     the nature of the document;

132. The Respondent also confirmed having obtained the signature of R.P. on
     June 25, 1998, under the false pretence that the guarantee agreement was
     an error and under the promise to revoke the said guarantee agreement;

133. On or around April 4, 2001, CIBC sent a letter to A.P. and B.P. with conform
     copy to K.P., requesting them to make necessary financial arrangements to
     provide the firm with payment in full of the balance owing of
     $ 309,151.14 CDN by April 11, 2001. Failing that, CIBC advised that they
     would proceed to exercise their rights with respect of the K.P.’s account
     which guarantees A.P. and B.P.’s account;

134. CIBC sold K.P.’s positions to cover the balance owed by A.P. and B.P., as
     confirmed in the letter sent by CIBC on April 27, 2001;



     viii) Forgery – Conduct unbecoming

     Count 24

135. In or around September 1997, the Respondent accepted a power of
     attorney for the account of Y Ltd. which he knew had not been signed by the
     beneficial owner of the account;

136. The Respondent accepted the forged power of attorney to speed up matters
     with his client;

137. Upon CIBC’s refusal to accept the forged power of attorney, the
     Respondent flew to London, England to obtain the signature of the
     beneficial owner of the account of Y. Ltd. on the power of attorney;

138. Afterwards, CIBC fined the Respondent $30,000 for having knowingly
     accepted a forged document.



NOTICE is further given that the Respondent shall be entitled to appear and be
heard and be accompanied by counsel or agent at the hearing and to call,
examine and cross-examine witnesses.
                                                                                 23


NOTICE is further given that the Association By-laws provide that if, in the
opinion of the District Council, the Respondent has failed to comply with or carry
out the provisions of any federal or provincial statute relating to trading or
advising in respect of securities or commodities or of any regulation or policy
made pursuant thereto; failed to comply with the provisions of any of the By-
laws, Regulations, Rulings or Policies of the Association; engaged in any
business conduct or practice which such District Council in its discretion
considers unbecoming or not in the public interest; or is otherwise not qualified
whether by integrity, solvency, training or experience, the District Council has the
power to impose any one or more of the following penalties :

          1) a reprimand;
          2) a fine not exceeding the greater of :
                   a) $1,000,000. per offence; and
                   b) an amount equal to three times the pecuniary benefit which
                      accrued to such person as a result of committing the
                      violation;
          3) suspension of approval of the person for such specified period and
             upon such terms as the District Council may determine;
          4) revocation of approval of such person;
          5) prohibition of approval of the person in any capacity for any period
             of time;
          6) such conditions of approval or continued approval as may be
             considered appropriate by the District Council.


NOTICE is further given that the District Council may, in its discretion, require
that the Respondent pay the whole or part of the costs of the proceedings before
the District Council and any investigation relating thereto.

NOTICE is further given that the District Council may accept as having been
proven any facts alleged or conclusions drawn by the Association in the Notice of
Hearing and Particulars that are not specifically denied, with a summary of the
facts alleged and conclusions drawn based on those alleged facts, in a REPLY.

NOTICE is further given that the Respondent has ten (10) days from the date on
which this Notice of Hearing and Particulars was served, to serve a REPLY
upon:
                                                                                24


      Investment Dealers Association of Canada
      1, Place Ville-Marie
      Suite 2802
      Montréal (Québec)
      H3B 4R4

      Attention : Me Caroline Champagne
                  4, Place Ville-Marie
                  Suite 210
                  Montréal (Québec)
                  H3B 2E7

A REPLY may either:

i)    specifically deny (with a summary of the facts alleged and intended to be
      relied upon by the Respondent, and the conclusions drawn by the
      Respondent based on all the alleged facts) any or all of the facts alleged
      or the conclusions drawn by the Association in the Notice of Hearing and
      Particulars; or

ii)   admit the facts alleged and conclusions drawn by the Association in the
      notice of Hearing and Particulars and plead circumstances in mitigation of
      any penalty to be assessed.

NOTICE is further given that, if the Respondent fails to serve a Reply or attend at
the hearing, notwithstanding that a Reply may have been served, the District
Council may proceed with the hearing of the matter on the date and at the time
and place set out in this Notice, or on any subsequent date, at any time and
place, without further notice to and in the absence of the Respondent, and the
District Council may accept the facts alleged or the conclusions drawn by the
Association in this Notice of Particulars as having been proven, and may impose
any of the penalties prescribed by the By-laws of the Association.

DATED at Montreal, Province of Quebec, this 19th day of January 2004.



___________________________________

CARMEN CRÉPIN
Vice-President, Quebec

INVESTMENT DEALERS ASSOCIATION OF CANADA
1, Place Ville-Marie
Suite 2802
Montreal (Quebec)
H3B 4R4
Broker broke promise, court told                                                          Page 1 of 2




   Broker broke promise, court told
   Elderly widow held responsible for losses of two unrelated CIBC World Markets
   clients


   PAUL DELEAN

   January 20, 2005

   Former CIBC World Markets broker Harry Migirdic assured the outraged son of one of his
   clients in 1998 that he'd rescind, within 48 hours, the guarantee which had her liable for
   the investment losses of another couple.

   But three years later, the guarantee was still in place, and CIBC ended up exercising it to
   seize about $300,000 from elderly widow Kiganouchi (Ketty) Papazian to cover a deficit in
   the account of two other Migirdic clients, Bedros and Aida Papazian, to whom she was not
   related.

   "It was the only money she had," said Richard Papazian, the son of Kiganouchi Papazian,
   who died in 2003 at age 78.

   Richard Papazian, 44, was a witness yesterday in the multi- million-dollar lawsuit of two
   other former Migirdic clients, Haroutioun and Alice Markarian, against CIBC World Markets.

   In his Superior Court testimony, Papazian said he looked after his mother's financial affairs
   after the death of his father in 1990. That meant dealing with her broker, Migirdic, and
   making sure her investments were safe.

   He said he was furious when he first learned of the guarantee in 1998 after closely
   examining a document Migirdic had brought him to get his mother to sign.

   It indicated she'd been guaranteeing the account of the unrelated Papazians since 1993.

   "He (Migirdic) said a mistake was made, and he needed her signature to correct and
   reverse the mistake made in 1993," Papazian said.

   He refused to bring the form to his mother to sign.

   When Migirdic insisted it was just a formality, Papazian signed his mother's name to the
   document. "I didn't want a valid signature on it."

   Papazian said he called Migirdic two days later, and "he said the guarantee was removed,
   everything's okay."

   The next time Papazian saw the document, it was as a fax sent to him in April 2001 by
   CIBC branch manager Tom Noonan, along with a 1993 document signed by his mother.

   Because she worked downtown in a clothing store that was in the same complex as the
Broker broke promise, court told                                                            Page 2 of 2



   CIBC office, Migirdic often brought forms to the store for her to sign, Papazian said.

   "She would not let me guarantee my own sister," Papazian said, "so I'm pretty sure she
   wouldn't guarantee someone she doesn't know."

   But Noonan informed him the CIBC considered it a valid guarantee. Papazian said he called
   the brokerage because a stockbroker had told his brother-in-law at church a day earlier
   there might be problems with Migirdic accounts.

   Migirdic, however, still insisted the guarantee was gone. The broker admitted Kiganouchi
   Papazian was on a list of problem accounts he'd provided to the CIBC, but Papazian said he
   assured him "it'd be taken care of like all the other times."

   Not even a letter sent to CIBC president John Hunkin, to which was attached a letter signed
   by Migirdic admitting his misdeeds, was enough to block the seizure, Papazian said.

   He recalled receiving a response from Hunkin a few days later that thanked him for his
   letter and misidentified his mother, calling her Winnie Hart.

   Migirdic, terminated by the CIBC in April 2001, last summer was fined $305,000 and barred
   for life from the securities industry by the Investment Dealers Association of Canada.

   During his testimony earlier this week, he admitted he had not paid any of that fine.

   Nor has he paid a $500,000 court judgment obtained against him by CIBC after his
   dismissal.

   Asked by the Markarians' lawyer, Serge Letourneau, if the CIBC had asked him to pay the
   judgment or seized any of his property, Migirdic said it hadn't.

   He also hasn't paid in full the $250,000 demanded from him in the mid-1990s by CIBC
   after it found him guilty of discretionary trading and reimbursed that amount to one of his
   clients.

   CIBC deducted a percentage from his commissions for a period of years after that - he
   wasn't sure how much in total - but it was less than $250,000, Migirdic said.

   The deductions stopped when he'd gone a certain period of time without further problems,
   he said.

   The trial continues today.

   pdelean@thegazette.canwest.com
                    A newsletter published by the
              Investment Dealers Association of Canada
                                                                                     Summer 2003

                       Regulatory Reform:
RT
                  a Securities Industry Priority
          This is the moment for securities regu-    regulators. The lack of cost information has
          latory reform. Never before has the        made it more difficult to evaluate the
          need been so great or the field so         potential benefits that might be achieved
          crowded. The IDA has examined the          from reform. To address this shortcoming,
          current proposals for change and ar-       the IDA retained Charles River Associates
          ticulated its position on what would       (CRA) to conduct an independent study,
          constitute success and what would          Estimating the Incremental Costs of Multiple
          represent failure.                         Securities Regulators in Canada, which is
                                                     available to governments and regulators
          Currently, there are three models with     involved in the current reform efforts.
IDA REP

          real potential: a federal commission,
          a pan-Canadian commission and the Although each of the three models has the
          current structure of 13 provincial and potential to be developed into an efficient
          territorial commissions.                 and well-functioning regulatory structure
                                                   for Canada, we need to set the bar high. We
          A regulatory system must be capable should be aiming for dramatic
          of achieving and balancing the improvement, not merely tinkering. What
          overarching regulatory goals of inves- we urgently need is the equivalent of a
          tor protection, as well as efficiency home run—regulation that will truly meet
          and competitiveness. To fulfill this Canada’s needs.
          dual mandate, it should have the fol-
          lowing characteristics: regulatory ex- For additional information about IDA
          pertise and in-depth knowledge of positions, please visit www.ida.ca/
          capital markets; regional representa- Regulation/Regulatory Proposals:
          tion to ensure sensitivity to local mar- • IDA Response to the Wise Persons’
          kets and small businesses;                   Committee Questions to the Canadian
          cost-effectiveness; flexibility and re-      Capital Markets Community, June 30, 2003
          sponsiveness to changes in markets; • IDA Response to Provincial and
          uniformity of rules or, at a minimum,        Territorial Ministers Discussion Paper
          a high degree of harmonization; po-          Securities Regulation in Canada: an Inter-
          tential for consensus; governance that       Provincial Securities Framework, July 8, 2003
          assures objectivity; appropriate inde- • IDA Response to Request for
          pendence and accountability to gov-          Comments: Canadian Securities
          ernment; and an ability to represent         Administrators Uniform Securities
          Canada internationally.                      Legislation Project: Blueprint for
                                                       Uniform Securities Laws for Canada
          While the debate over reform has
          been long-standing, there is little in Please see also in Media, Events &
          the way of empirical evidence on the Speeches/Speeches:
          costs to be saved by market • Regulatory Reform: Who’s On First, Address
          participants from dealing with fewer         by Joe Oliver, President and CEO
    •   Canada’s Capital Markets: Learning from Andy    Shortly thereafter, a number of initiatives were
        Warhol, Address by Joe Oliver                   undertaken that appeared likely to match and
    •   Regulatory Reform: Made-in-Canada, Address      perhaps exceed the proposed amendments to
        by Joe Oliver                                   Regulations 1300.1 and 1300.2. These included
    •   New Approaches to Regulating the Financial      the publication in October 2001 of the Basel
        Services Sector, Address by Paul Bourque,       Committee for Banking Supervision report,
        Senior Vice-President, Member Regulation        Customer Due Diligence for Banks, and the initia-
                                                        tion of a review of the FATF 40 Recommenda-
    The Association encourages Members to par-          tions, beginning with the publication in May
    ticipate in this important consultation process.    2002 of a consultation paper and request for
                                                        comments.
    For more information, please contact:
    Joe Oliver                                          In light of these international developments,
    President & CEO                                     the Association withdrew the proposed
    (416) 865-3020 or joliver@ida.ca.                   changes to Regulations 1300.1 and 1300.2 in
                                                        order to ensure that the final changes were
                                                        consistent with developing international
    Beneficial                                          standards. That development process was
                                                        completed on June 20, 2003 with the
    Ownership &                                         publication by the FATF of its final revised
    Offshore Accounts                                   Recommendations.

                                                        On June 22, 2003, the IDA Board of Directors
    The beneficial ownership of private corporate       approved amendments to Regulation 1300 re-
    brokerage accounts has always been a signifi-       lating to Know Your Client Requirements for
    cant regulatory concern to the securities indus-    Non-Individual Accounts. The proposed
    try and especially so in jurisdictions which have   amendments to Regulation 1300 address the
    been identified by the Financial Action Task        issue of the need to know the beneficial own-
    Force (FATF) of the Organization for Economic       ers behind a corporate account. The new
    Cooperation and Development (OECD) as               policy will require IDA Member firms, when
    lacking proper financial oversight systems.         opening an initial account for a corporation or
                                                        similar entity, to identify and then verify the
    In October 2001, the Association passed             identity of the beneficial owner. Verification
    changes to Regulations 1300.1 and 1300.2            is to be completed as soon as is practicable and
    which would have required Members to ob-            in any case no later than six months.
    tain beneficial owner information where pos-
    sible, but would have permitted them to open        Highlights of the amendments include:
    accounts for which the information could not        • beneficial ownership information require-
    be obtained subject to special approval and            ments refer to individuals, whether their
    account monitoring provisions. At that time,           ownership is direct or indirect, as in owner-
    there were no similar provisions in the secu-          ship through other corporations or trusts;
    rities laws and regulations in other countries      • knowledge of beneficial ownership is not
    with well-developed capital markets, in Ca-            required for certain types of corporations
    nadian anti-money laundering laws and regu-            and trusts;
    lations, or in the international standard for       • for new accounts of private corporations and
    anti-money laundering regimes, the 40 Rec-             similar entities, the identity of the beneficial
    ommendations of the Financial Action Task              owners must be obtained and verified;
    Force (FATF).                                       • for new accounts of trusts, the identities of

2
    the settlors and beneficiaries, where known,     In October 2001, the IDA conducted a survey of
    must be obtained and verified;                   IDA Member firms to identify the number of
•   where the identities of beneficial owners,       non-individual accounts in Non-Cooperative
    settlors or beneficiaries, as appropriate, are   Countries and Territories (NCCT) jurisdictions.
    not known for accounts open at the time the
    changes are implemented, Members will        The survey identified a total of 13,000 non-North
    have one year after implementation to ob-    American offshore accounts. Of that number,
    tain the information.                        some 3,000 were located in NCCT jurisdictions.
                                                 Of these accounts, 740 were non-individual ac-
An exemption for the accounts of financial in- counts in the name of entities where the benefi-
stitutions regulated in their home jurisdictions cial owners may not be fully disclosed.
and their affiliates is provided. However, the
Association is empowered to remove the ex- On March 6, 2002, the IDA announced an Action
emption for financial institutions in jurisdic- Plan to review the survey of offshore accounts
tions found by the Government of Canada or and provided a commitment to move quickly
international organizations of which Canada is in response to upcoming regulatory
a member to have deficient regulatory regimes. developments.

An exemption is also provided for publicly Sales compliance examination programs were
traded corporations, trusts and similar entities revised to ensure these 740 accounts were re-
and their affiliates.                             viewed in the course of regularly scheduled
                                                  sales compliance reviews to identify the ben-
It should be noted that this proposal represents eficial ownership and determine if there are
a significant change from the current practice any signs of suspicious activity and to follow
and requirements in the industry today.           up with firms if there is evidence that an ac-
                                                  count has not been properly supervised. The
The new policy will be sent to the securities follow up work has determined that 387 of the
commissions for approval, following review 740 accounts were mistakenly included (in fact,
and public comment. The IDA will continue they were not non-individual accounts) which
to keep you informed about developments left 353 high-risk accounts. It has been deter-
surrounding this important policy.                mined that, although not on file, the beneficial
                                                  ownership was known by the firm with respect
IDA Offshore Account Survey Action                to 211 of these accounts.
Plan
While the rule changes described above cover A number of referrals have been made to IDA
all corporate accounts, both domestic and off- Enforcement and other regulatory agencies
shore, accounts located in countries without a concerning these accounts.
credible financial oversight system or which are
unwilling to assist investigations by foreign For more information, please contact:
authorities are of the most interest to regula- Paul Bourque
tors. Where the beneficial ownership of such Senior Vice-President, Member Regulation
accounts is unknown, the risks of abuse are (416) 865-3038 or pbourque@ida.ca.
particularly high. Any plan to manage the risks
arising from these kinds of accounts must iden-
tify these accounts and provide criteria for fur-
ther review by the firm compliance department
and/or the regulators.


                                                                                                       3
    Our New Chair                                     Our New Vice-Chair
    The Investment Dealers Association of Canada      Also at the AGM, Brian Porter was appointed
    is pleased to announce the appointment of G.F.    as the Vice-Chair of the Board of Directors. Mr.
    Kym Anthony, President and Chief Executive        Porter is currently Executive Managing Direc-
    Officer of National Bank Financial, as Chair of   tor, Scotia Capital Inc.
    the Association. Mr. Anthony was appointed
    at the AGM held in St. Andrews by-the-Sea,        Mr. Porter has served over 22 years with Scotia
    New Brunswick.                                    Capital in a broad range of senior management
                                                      roles. He oversees the execution and delivery
    Mr. Anthony began his career with CIBC Wood       of products and services in Investment Bank-
    Gundy and worked in Toronto, Calgary, Lon-        ing, Corporate Banking, Mergers and Acquisi-
    don and Tokyo. From 1993 to 1998, he was          tions, Institutional Equity Sales and Trading,
    Chairman and Chief Executive Officer of TD        Equity Research and Equity Capital Markets.
    Securities and latterly Vice Chair of TD Bank.
    Mr. Anthony previously served as Vice-Chair       Mr. Porter is a member of the Investment Deal-
    of the Investment Dealers Association and has     ers Association Executive Committee and Di-
    been a member of the Executive Committee of       rector of the Ombudsman for Banking Services
    the Board.                                        and Investments. He is also a Director and
                                                      Capital Campaign Chair of Bridgepoint Health
    Mr. Anthony is on the board of ComDev Inter-      Foundation and a Director of Invest in Kids.
    national and the Canadian Opera Company.



    The 2003 - 2004 Board of Directors
    At the AGM, a number of new directors were        Canada Securities, and Gary Reamey,
    confirmed in their appointments.                  Principal, Canada, Edward Jones, have been re-
                                                      nominated and appointed to serve another
    James Baillie, QC, and Michael Grandin were       term as Industry Directors.
    appointed as Public Directors for two–year
    terms. John Howard, QC and Alain Rhéaume          The IDA extends many thanks to the retiring
    have agreed to serve their fourth two-year        Directors for their contributions: Public Direc-
    terms as Public Directors. As well, Debra         tor, Marie-José Nadeau; Industry Director,
    Hewson, Vice-President and Chief Operating        Michel Duchesne, Managing Director, RBC
    Officer, Odlum Brown Ltd., will also sit on the   Dominion Valeurs Mobilières Inc.; NAC Chair
    Board in her capacity as Chair, National Advi-    Ray Smallwood, Vice-President and Director,
    sory Committee.                                   CIBC World Markets Inc.; and Industry Direc-
                                                      tor and Past Chair of the IDA Bill Packham,
    The following Industry Directors have also        President and Chief Executive Officer, First
    been appointed to the Board for a two year        Associates Investments Inc.
    term: Frank Laferriere, Chief Operating
    Officer and Chief Financial Officer, Berkshire    For more information, please contact:
    Securities Inc. and Thomas Monahan,               Ken Nason
    Managing Director, CIBC World Markets.            Association Secretary
    Colleen Moorehead, President, E*Trade             (416) 865-3046 or knason@ida.ca.

4
87th Annual Meeting & Conference
The IDA’s 87th Annual Meeting and Conference          held the audience rapt, sharing his story and
was held June 22-24 in St. Andrews by-the-Sea,        expressing his thanks to the industry for their
New Brunswick. The event was held at the              support during that difficult time.
Fairmont Algonquin Hotel, and included a
powerful line-up of speakers and industry             James Webb, a Vietnam war hero and former
leaders, a broad range of entertaining social         Secretary of the U.S. Navy, was the keynote lun-
activities, and of course, a golf tournament.         cheon speaker, discussing Government Ethics in
                                                      the Post-Iraq War Era. Barbara Stymiest, CEO
The program of speeches, presentations and            of the TSX; Luc Bertrand, President and Chief
panel discussions focused on the topic of Navi-       Executive Officer of Montréal Exchange; Ralph
gating Through Uncharted Waters as the indus-         Acampora, Managing Director of Prudential
try deals with major change. IDA Chair Terry          Securities; Arnaud de Borchgrave, Editor at
Salman opened the conference with his ad-             Large, United Press International; and Donald
dress entitled Self-Regulation Works Best by Put-     Putnam, Chairman, CEO and Managing Direc-
ting the Public Interest First. IDA President and     tor, Putnam Lovell NFB Securities Inc., also
CEO Joe Oliver addressed the very topical is-         addressed the delegates over the three-day
sue of regulatory reform in his speech, Regula-       conference. Sessions were also held with Tom
tory Reform: Who’s on First? He also discussed        Schneeweis, CISDM/Isenberg School of Man-
the findings of the Charles River Report, Esti-       agement; Steven Larke, Vice President, TD
mating the Incremental Costs of Multiple Securities   Newcrest; Stan Hartt, Chairman, Citigroup
Regulators in Canada, an independent study on         Global Markets Canada Inc.; James Kiernan,
regulatory burden. (See cover story).                 President & CEO, Cornerstone Capital Part-
                                                      ners; and Garry Jones, CEO & President,
Ian Russell again pleased the crowd with his          Brokertec Europe Ltd. Copies of speeches and
presentation on the status of the securities in-      presentations are available at the IDA website
dustry, entitled Through the Crucible of Fire.        (Media, Events & Speeches/Annual Confer-
                                                      ence/Conference 2003/Speeches).
Lively panel discussions were held to address
current issues facing the industry. View from         Several key policy initiatives were approved
the Regulators featured David Brown, Chair of         at the Board of Directors Meeting, including
the Ontario Securities Commission, Stephen            new measures to deal with offshore accounts
Sibold, Chair and CEO of the Alberta Securi-          and new measures for inclusion in Policy 11 -
ties Commission and Pierre Godin, Chair of            Analyst Standards.
the Québec Securities Commission. The Lead-
ers Panel, Strategic Positioning in Response to       Delegates and guests were treated with down
Regulatory Reform, Difficult Markets and Structural   home Atlantic Canada hospitality and enter-
Change, included Frank Laferriere, Brian Por-         tained by the sounds of Fiddles & Feet and
ter and Bruce Ramsay.                                 Raylene Rankin & Friends. The conference con-
                                                      cluded with a black tie gala and cabaret.
The IDA was pleased and privileged to wel-
come Howard Lutnick, President of Cantor              Thanks are due to the 2003 Conference Plan-
Fitzgerald. Not only is he a recognized expert        ning Committee for their efforts in making this
on financial markets and financial services tech-     a successful conference: Chair Phipps
nology, he is also the head of one the hardest        Lounsbery, CIBC World Markets Inc.;
hit companies in the September 11 tragedy. He         Deborah Armour, Raymond James Ltd.; John

                                                                                                         5
    Fitzpatrick, TD Securities Inc.; Lonsdale Hol-   Next year’s conference will be held in Mont
    land, Beacon Securities Limited; Mary Jacobs,    Tremblant, Québec at the Fairmont Tremblant
    CIBC World Markets Inc.; Al McLaughlin, RBC      from June 13-16, 2004.
    Dominion Securities Inc.; Georges Paulez,
    Mirabaud Canada Inc.; and Kristine Vikmanis,     For more information, please contact:
    BMO Nesbitt Burns Inc.                           Connie Craddock
                                                     Vice-President, Public Affairs
                                                     (416) 943-5870 or ccraddock@ida.ca.


            The Fairmont Algonquin




    Kym Anthony receives the
    Chair’s Pin from Terry Salman.




                                                                              2002 - 2003 Chair
                                                                                   Terry Salman




                                                                 Terry Salman presents Howard
                                                                 Lutnick with a gift.


6
                                                     securities crime. I have also written several
The President’s                                      provincial Ministers of Justice calling for the

Report                                               creation of special courts that can effectively
                                                     deal with lengthy and complex cases involv-
                                                     ing corporate and securities malfeasance.
It is my role to review the highlights of the
Association’s activities and accomplishments       In that connection, I am pleased that the Final
during the past year, with an emphasis on our      Report of the Five Year Review Committee rec-
SRO responsibilities. I also want to recognize     ommended that the Ontario Securities Act be
the impressive contribution of the many indus-     amended to provide SROs with the additional
try volunteers and dedicated staff in achiev-      enforcement powers that we had requested.
ing our goal of fostering integrity and efficiency They include jurisdiction over former employ-
in the Canadian capital markets.                   ees, the ability to file decisions of disciplinary
                                                   panels as decisions of the courts, to compel
An extended bear market, corporate scandals, witnesses to attend disciplinary hearings and
war, strained relations with our most important to seek a court-ordered monitor, as well as
trading partner, SARS, Mad Cow disease - statutory immunity from civil liability. These
surely these ingredients are sufficient to fulfill powers will permit the IDA to discharge its
the Chinese curse, “May you live in interesting enforcement responsibilities more effectively.
times.” The year has not been an easy one for
investors or for the capital markets, with a Regulatory reform has been another key priority
whole series of events impacting on investors’ and your Association has taken a leadership role
confidence and trust in the integrity of the in the ongoing public debate. We have
market place – issues at the core of our reviewed and provided our positions on the
mandate. Restoring investors’ confidence has various options for new regulatory structures.
been a key priority for your Association and I The Association provided comments on the BC
am pleased to report on several very significant Securities Commission’s two concept papers
initiatives undertaken this year.                  and draft legislation, the OSC’s Fair Dealing
                                                   Model, the Uniform Securities Legislation
Policy 11 - Analyst Standards, approved by our Blueprint, and the Wise Persons’ Committee
Board of Directors yesterday, will enhance in- consultation paper. We will also submit our
vestor confidence with tough but fair rules and views to the provincial Ministerial committee
guidelines that address conflicts of interest. The and continue to dialogue with governments and
successful launch last fall of the Ombudsman regulators with the objective of bringing our
for Banking Services and Investments, com- regulatory expertise and capital markets
bined with our national arbitration program, knowledge to this important public debate.
means that we have the best of class consumer
redress mechanism.                                 We have also taken every opportunity to raise
                                                   the important issue of the content of regula-
The Association welcomes the federal tion. While who regulates is, of course, impor-
government’s announcement last week of the tant, what and how are equally critical. Costs
creation of six Integrated Market Enforcement also matter, if we are to have competitive and
Teams dedicated solely to capital markets healthy Canadian capital markets. That’s why
fraud cases. We had earlier recommended to we commissioned the Charles River Study on
the government the creation of specialized in- the costs of regulation as a constructive contri-
tegrated units, combining policing and regu- bution to this important debate. We also pre-
latory resources and expertise to put additional sented the Association’s position on
teeth into the investigation and enforcement of Sarbanes-Oxley and governance reforms to the

                                                                                                        7
    Senate Committee on Banking, Finance and            Maysar Al-Samadi was appointed to the new
    Commerce and appeared before the House Fi-          position of Vice-President, Professional Stan-
    nance Committee on the capital markets im-          dards with responsibilities for national coor-
    plications of bank mergers. Finally, we             dination of CSA oversight examinations, as
    presented before the Commission des finances        well as managing internal and external report-
    publiques de l’Assemblée nationale du               ing requirements and implementation of a
    Québec, in respect to Bill 107, which restruc-      quality assurance program.
    tured Québec’s securities regulation.
                                                        Registration, Finance and IT staff worked to
    I am pleased to report a successful year for both   complete the National Registration Database
    our Member Regulation and Industry Relations        project. It went live on March 31, 2003. The first
    and Representation Departments.                     three-year cycle of Continuing Education con-
                                                        cluded December 31, 2002. This was a signifi-
    Member Regulation substantially achieved all        cant achievement not only for the Association
    its benchmarks and performance measures in          but also for the industry.
    2002. It expanded the use of risk assessment
    strategies that allow the Association to better     Your Association has worked effectively in
    identify, prioritize, mitigate and eliminate        partnerships with other regulators in Canada
    high-risk situations. The result will be more       and internationally. The Enforcement
    effective regulation, at reasonable cost. Finan-    Department established partnerships with the
    cial Compliance fully implemented its risk as-      Securities and Exchange Commission and the
    sessment model on April 1st and was able to         North American Securities Dealers Association.
    re-allocate examiner resources from low-risk        In addition, it undertook an unprecedented
    to high-risk firms. Enforcement also fully          number of joint investigations with four
    implemented its risk assessment model with          securities commissions and two other SROs.
    the approval of Policy 8 in June and the Octo-      Other joint projects included the Conflicts of
    ber 15 launch of Comset, the web-based com-         Interest Rules, the Debt Market Regulation
    plaints and settlement reporting system.            Project, the Offshore Accounts Survey and the
                                                        first conference ever held in Canada on self-
    Member Regulation completed an important            regulation. This was such a successful event,
    reorganization with the creation of two new         with over 250 delegates, that we intend to offer
    positions: Vice-President, Québec and Vice-         an SRO conference program next year in
    President, Professional Standards.                  Toronto and Montréal. We are also working
                                                        with fellow Canadian Capital Markets
    The Vice-President, Québec is responsible for       Association members on the important STP
    the Montréal regional office and front-line de-     initiative, the move to straight-through
    cision making for all operational regulatory        processing.
    decisions in Québec. The new position dem-
    onstrates the IDA’s commitment to the highest       Terry Salman has just reported in some detail
    standards of regulation and to a strong presence    on our Industry Relations and Representation
    in Québec. We were delighted that Carmen            accomplishments, which demonstrate our com-
    Crépin accepted the senior position in Québec       mitment to reach out to all our Members. Your
    for the IDA and we have valued her contribu-        Association also represented Member firms in
    tion during the past year. Her involvement and      a number of areas critical to the Canadian capi-
    that of an exceptional, strong District council,    tal markets. During the past year, we have spo-
    as well as a long history of serving Québec in-     ken across the country on the state of our capital
    vestors, position the IDA well in the forthcom-     markets and the urgent need for regulatory
    ing application for official recognition.           reform. We have articulated Association posi-

8
tions and views through television and print
media coverage and presented papers at inter-
                                                    Outgoing Chair’s
national regulatory conferences.                    Address
I want to express my appreciation to Terry
Salman for his leadership and support during        I have always believed that it is far more im-
a challenging and productive year. In spite of      portant to look ahead to see what’s coming than
heavy responsibilities at his firm, Terry has       to focus on the view in the rearview mirror.
devoted himself unstintingly to the IDA. In         However, it’s necessary from time-to-time to
addition to an exhaustive speaking schedule         review where you’ve been to make sure that
across the country, Terry also found the time       your course remains true and your commit-
to chair our special Board Committee on Policy      ment firm.
11 and to participate in an array of issues.
                                                    A year ago at Whistler, I outlined several ini-
The input of staff has also been critical to tiatives that would guide my energies as your
achieving our goals. We have a terrific team Chairman. I said we would work for the adop-
of bright, energetic and devoted professionals tion of public policies that would serve the
who are making a positive contribution to growth of effective and efficient capital mar-
Canada’s capital markets.                           kets and that we would commit to increasing
                                                    our regulatory activities and efficiencies. I com-
I am looking forward to working with Kym mitted that we would support policies to
Anthony, our incoming Chair. The Association strengthen the small and mid-sized business
benefits greatly from its ability to attract senior sector and we would work to build on the suc-
industry professionals with exceptional back- cess of the Regional Dealers Committee and
grounds who are willing to devote time and its contribution of ideas and policy initiatives
experience, on behalf of the industry, other to our regional firms.
market participants and investors.
                                                    So, how have we done? Specifically, we pressed
Finally, I want to thank the hundreds of indus- for changes to federal tax law that would ben-
try professionals who devoted so generously efit small business financing and venture capi-
of their time to our Board, District Councils and tal, and were successful in influencing changes
committees. You provide the input that justi- to the Limited Partnership rules and improve-
fies a self-regulatory approach to the securi- ments to capital gains rollover provisions that
ties industry by assuring that our policies and will encourage greater institutional investment
public positions are principled, of high qual- in venture capital.
ity and broadly representative of the entire
membership. Your contribution is essential to       We proposed a tax measure which would as-
the continued strength of the Association and       sist junior public markets in Canada by lower-
its ability to protect the integrity and enhance    ing the inclusion rate on capital gains for new
the competitiveness of the Canadian capital         issues by small, publicly-listed companies.
market.                                             Sadly, the government did not include this mea-
                                                    sure in this year’s budget, but we will be redou-
Joseph J. Oliver                                    bling our efforts to have it included in the future.
President & CEO
Annual General Meeting, June 23, 2003.              We were instrumental in the government’s
                                                    decision on the phased elimination of capital
                                                    taxes on corporations and we promoted
                                                    changes that will increase the RRSP

                                                                                                           9
     contribution limits. These are initiatives that       Regulatory reform has long been a goal of the
     will benefit all Canadians.                           IDA. Over the past twelve months, reform has
                                                           not only been at center stage but the spotlight
     Recognizing the growing importance of the in-         is burning brighter and hotter than ever before.
     come trust sector of our capital markets, we          The IDA sees regulatory reform as not only
     worked with both provincial and federal gov-          necessary, but essential for the operation of
     ernments to secure beneficial changes to this         healthy capital markets.
     market. In Ontario, we argued persuasively to
     introduce legislative amendments that would           Healthy capital markets are built on trust gov-
     limit the liability for unit holders of income        erned by effective regulation. Sadly, we have
     trusts.                                               seen just how quickly the trust we have worked
                                                           so long to build can evaporate. And while the
     We also brought to the attention of the Federal       IDA embraces the belief that our rules and regu-
     authorities an anomaly of Federal tax law             lations must first and foremost protect the in-
     whereby income trusts are not recognized as           vesting public, they must also do so in a way
     securities for the purpose of lending and bor-        that does not create prohibitive costs and cum-
     rowing. Our efforts generated a response from         bersome procedures.
     the Finance Department indicating that this will
     be corrected in future legislation and we’re          This does not force us to choose between what
     working with the Finance officials to advise          is best for the investing public and what will
     them on how this can be done.                         benefit the capital markets. The needs and in-
                                                           terests of both are identical. The public wants
     The IDA provided specific proposals to the            to know that the playing field is level, fair and
     BC government designed to expand the role             transparent. If it is not, they will simply refuse
     of Vancouver’s designation as an International        to invest. At the same time, we want to pay a
     Financial Center. Taking a chapter from the           fair and competitive price for the regulation we
     success of Montreal as a vibrant IFC, we sug-         seek. It’s a fact that capital goes where it is
     gested changes that are currently under con-          treated best and we can never forget that the
     sideration. If adopted, these changes will            cost of regulation is ultimately borne by the
     maximize the potential of Vancouver’s IFC             consumer.
     and promote investment growth in BC’s finan-
     cial sector.                                          The IDA has and is providing active support
                                                           for regulatory reform in Canada in presenta-
     There is no question that access to capital is        tions and submissions – both public and pri-
     the lifeblood of all business and in particular       vate – to the Uniform Securities Legislation
     to small and medium sized businesses. Over            project of the CSA, the BCSC’s New Proposals
     the past year the IDA has provided vigorous           for Securities Regulation, the Ontario
     support for the reform of private placement           government’s Five-Year Review of securities
     rules to provide companies with greater flex-         legislation, the Provincial Finance Ministers’
     ibility in structuring and distribution. Our ef-      Working Committee studying ways of stream-
     forts contributed significantly to the adoption       lining our regulatory regime, and the Federal
     of “Multilateral Instrument 45-103” by a ma-          government’s Wise Persons’ Committee. Lit-
     jority of provinces. While it is an important first   erally many hours have been spent by the Ex-
     step in harmonizing the private placement             ecutive Committee and senior IDA staff
     rules in this country it is also an indication that   preparing and advocating our views.
     we have more work to do to ensure that com-
     panies can achieve access to capital with maxi-       I am personally very proud of the work that
     mum ease and flexibility.                             we have done in the formulation of IDA Policy

10
11 governing the conduct of research analysts       This is a momentum that we must maintain,
at Member firms. We formed a sub-committee          and I have no doubt that our incoming Chair,
of the IDA Board, which I chaired, that com-        Kym Anthony, will fulfill that role with a
prised a majority of our public directors, in-      forceful and effective style that has
cluding Tom Allen, Alain Rhéaume, John              characterized his entire professional career.
Howard and our President Joe Oliver. The sub-
committee provided direction and oversight to      The current debate on corporate governance in
the rule-making process. It was a challenging      Canada and the United States has increased the
task to craft effective and practical rules that   focus on the composition and structure of Boards
mirrored the recommendations of the Crawford       of Directors. We at the IDA take this debate very
Committee on Analyst Standards, and closely        seriously, and I am very proud of the fact that
matched the U.S. rules embedded in NASD            in the past year we were able to add Michael
Policy 2711. One of our key objectives was to      Grandin and Jim Baillie to our board as public
harmonize Canadian and U.S. rules on analyst       directors. Their intimate knowledge of the capi-
standards so that research produced by Cana-       tal markets and their impeccable credentials and
dian and U.S. analysts can flow freely within      character are a most welcome addition to an al-
the North American marketplace.                    ready outstanding Board of Directors. I would
                                                   like also to thank the retiring directors for their
To address the regulatory burden faced by our contribution in particular, Marie- José Nadeau,
regional dealers with respect to multiple regu- Bill Packham, Ray Smallwood and Michel
latory environments, the IDA initiated a study Duchesne.
by Charles River Associates into the true costs
of our current regulatory system. The results I would be remiss if I did not acknowledge the
of this study have just been delivered to your depth of talent and tireless support of the IDA
Board and will be released to the public.          senior staff. Without the energy and intellec-
                                                   tual capital of Joe Oliver, Ian Russell, Paul
For the first time, we have a statistically valid, Bourque, and Keith Rose and all the dedicated
quantitative analysis of the cost of our current support staff, it would be impossible for this
multi-jurisdictional regulatory system. Anec- organization to achieve its regulatory and ad-
dotally, the public, the investment industry, vocacy responsibilities. To all of you, I would
politicians and regulators have known the sys- like to say, thank you, for your support dur-
tem needed to be reformed to make it more effi- ing my year as your Chairman.
cient. Now, we have an accurate benchmark that
tells us just how far we have to go. This study While much has been accomplished in the past
will reinforce our recommendations and pro- year our agenda going forward is full and chal-
vide added momentum to regulatory reform.          lenging. We are in the process of shaping the fu-
                                                   ture of the capital markets and it’s a future in
Continual communication of the policies and which the IDA has a critical role to play. We want
proposals of the IDA is critical. We cannot rely fair, effective, efficient, competitive and prosper-
on others to make our arguments for us. This ous capital markets for all Canadians. It’s a tall
year, as your chairman, I embarked on an am- order but we can settle for no less.
bitious speaking agenda. From St. John’s New-
foundland to Victoria, I had the pleasure on To the Board and to everyone at the IDA you’ve
ten separate occasions to speak to a broad made this a year to remember. Thank you.
cross-section of Canadians whose influence
will have a profound impact on the future of Terrance K. Salman
our capital markets.                               Chair, 2002 - 2003
                                                   Annual General Meeting, June 23, 2003.

                                                                                                         11
     Chair’s Address                                   Rose is stepping easily into his shoes. A great
                                                       compliment to the IDA has been the addition
                                                       of the head of the Québec region, Carmen
     It is a great honour for me to be appointed Chair Crépin. She is not only well known and re-
     of the Investment Dealers Association and I ac- spected, but is well versed in all of the major
     cept the position with humility and determi- issues of the day and I know that we will rely
     nation. The 87th year of the IDA promises to be on her heavily in the coming year, especially
     exciting. It promises to be challenging, if not as it relates to the recognition issue in Québec.
     difficult. And it promises compelling oppor-
     tunities that lie before us as an industry and as We also have a very strong Board of Directors.
     an Association.                                   Jim Baillie, Q.C. and Michael Grandin as great
                                                       new public directors, fill out the independent
     For the past several years, I have had the plea- directors roster of Ken Copland, Marie-José
     sure of serving on your Executive Committee Nadeau, Ruth Goldbloom, Alain Rhéaume,
     under past Chairs Chuck Winograd, Jacques John Howard and Paul Hill. We will be rely-
     Ménard and Bill Packham, and as Vice-Chair ing on these directors’ navigational expertise
     under Terry Salman. All have served their man- as we traverse some of the dangerous and un-
     dates with commitment and dedication to our charted waters that lie ahead.
     collective task at hand: to enhance the industry
     as a whole for the benefit of all capital market I don’t need to remind any of you that these
     participants and stakeholders. In particular, I are indeed difficult times. We have endured
     would like to express my respect and admira- the longest bear market in almost 30 years, we
     tion for your outgoing Chair, Terry Salman. live in an environment of tremendous regula-
     Terry and I have crossed paths over the last tory flux, a lack of investor confidence, corpo-
     twenty-odd years and his energy, drive and de- rate and market scandals, and a global economy
     termination expressed in the service of this or- that is having a huge challenge generating
     ganization are worthy of all of our appreciation. business investment and jobs.

     As an Association, we are fortunate to have an      However, when there are times of uncertainty,
     extremely able and experienced management           there is opportunity, and as long as we keep
     team and Board to draw upon and to support          our eyes on the prize - efficient, effective and
     us. Of course, our President and CEO, Joe           fair regulation leading to a transparent and
     Oliver, by virtue of his knowledge, experience      level playing field for investors - our capital
     and tenacity, is as well versed on the major is-    markets will prosper.
     sues facing our industry as anyone in this
     country. As Chair of the Member Regulation          And what about the year ahead? What are we
     Oversight Committee, I had the privilege to         to face? There is virtually no aspect of the IDA’s
     work with Paul Bourque a great deal. I can          operating umbrella that is not facing some de-
     assure you that this important area of the IDA      gree of review or pressure.
     is in very safe and professional stewardship.
     Brian Porter will see this first hand as he takes   To some extent the next year will see us carry
     over the Chair of this committee.                   through on programs and issues which are al-
                                                         ready underway. New and unforeseen issues
     You all know Ian Russell, of course, and his        will inevitably arise during the year, includ-
     invaluable contribution to the Association over     ing further consolidation in the financial ser-
     many years. We have lost the steady hand of         vices industry. That being said, as I see it, the
     Sandy Grant our Senior Vice-President, Finance      following are our top priorities going into the
     & Administration, to retirement, but Keith          next year.

12
Québec Recognition:                                    The development and monitoring of the
No wait, we really mean it this time! In addition      Ombudsman for Banking Services and
to bringing the recognition issue to a head, Bill      Investment to help them meet their objectives
107 has created the framework for a new,               of providing a user-friendly, accessible,
powerful agency which will have an important           independent and free consumer redress system
voice in the structure and regulation of the           is an example of this.
capital markets in Canada. I believe there is a
new receptivity to recognition and to                  As we all know, investor confidence is a frag-
influencing the capital markets in a constructive      ile, complex feeling. It has been damaged by
way in Québec. I will be moving to Montréal            scandals, misleading financial reporting, un-
myself and Joe, Carmen and I will be working           ethical behaviour in our industry, a disap-
very hard on this issue.                               pointing economy, and financial losses in the
                                                       market.
Regulatory Reform:
As you know, there are many initiatives un-            We cannot control what others do or the direc-
derway at the federal and provincial levels,           tion of the markets, but we can control the eth-
both at the government and at the regulatory           ics and culture of each of our firms and of the
level, whose objective is to make Canada’s             industry supporting the capital markets. High
regulatory system more efficient, competitive          ethical standards are the result of day-to-day
and responsive to developments in global               decisions made in the context of a culture of
markets. It is critical that we stay on top of all     good and sound values, not platitudes. After
of these, specifically the CSA Uniform Legisla-        all, people differ little on what they call evil,
tion Project, the provincial Ministerial Commit-       but unfortunately, they differ greatly on what
tee and the Wise Persons’ Committee. We are            they call excuseable.
providing in-depth commentary and responses
to all of these. It is imperative that these initia-   Investors need to know that we stand for ethi-
tives lead to constructive change for the capi-        cal dealing and we need to act and behave ac-
tal markets and not be wasted effort.                  cordingly.
Personally, I am less concerned about the re-
sulting overall regulatory structure than I am         Membership:
about reducing costs and increasing efficiency.        We must continue to enhance the involvement
The passport system of registration would be           of Members in the activities of the IDA, includ-
an example of such a step which would pro-             ing policy development. This includes the
vide a meaningful improvement to the indus-            strengthening of the advocacy agenda of the
try. I am also very much about protecting              Regional Dealers Committee, which addresses
regional input and differences.                        concerns about regulatory burden, their influ-
                                                       ence in the IDA and small business financing.
It is also important that we are seen to be act-
ing swiftly and decisively on the issue of off-I must say that I face the prospect of regula-
shore accounts. Your Board has a new by-law    tory reform and the coming year with much the
in hand to keep us at the forefront of this issue
                                               same perspective as Chesterton: the reformer
now that the OECD task force has issued its    is always right about what is wrong. He is gen-
recommendations.                               erally wrong about what is right. Change for
                                               change’s sake will not be helpful. Progress
Investor Confidence:                           should mean that we are changing the world
Many initiatives are well underway relating to to fit the vision. Instead we always seem to be
this issue through sound policy, effective changing the vision.
compliance and tough but fair enforcement.

                                                                                                           13
     In closing, I look forward to serving you in the   The August Notice acknowledges that, al-
     upcoming year and my door, e-mail and phone        though Treasury and the IRS are working to-
     are always open.                                   ward implementation of an alternative,
                                                        simplified reporting regime for RRSPs and
     This past year has been a challenging one but      RRIFs for future taxable years, no Form 3520
     progress has been made. There is much to be        or 3520-A is required to be filed for the 2002
     done.                                              tax year if the beneficiary of a RRSP or RRIF:
                                                        • makes or has made an appropriate election
     Kym Anthony                                            pursuant to the Canada/US Income Tax
     Chair 2003 - 2004                                      Treaty to defer the income in the plan, and
     Annual General Meeting, June 23, 2003.             • received no distribution from the plan dur-
                                                            ing the 2002 tax year.

     Compliance with                                    The August Notice also provides that if an
                                                        individual, RRSP, or RRIF has filed a Form
     US Tax Laws –                                      3520 or 3520-A, but has failed to provide all
                                                        appropriate information, the IRS may request
     Beneficiaries of                                   the individual or plan to provide the

     RRSPs and RRIFs                                    information. However, unless the IRS requests
                                                        such information and the individual or plan
                                                        fails to provide the IRS with the information
     A Notice issued by the US Internal Revenue         requested, no individual or plan that files or
     Service (IRS) during April 2003 subjected US       has filed a Form 3520 or 3520-A will be subject
     citizens and residents to complex US filing re-    to failure-to-file penalties.
     quirements if they owned, contributed to, or
     made withdrawals from, Registered Retirement       In addition, the August Notice provides that
     Savings Plans (RRSPs) or Registered Retirement     where an individual has filed his or her 2002
     Income Funds (RRIFs). Failure to file the forms    return on a timely basis without making the
     could have resulted in severe penalties.           election to defer tax pursuant to the Canada/
                                                        US Income Tax Treaty with respect to a RRSP
     On June 16, a delegation representing the IDA,     or RRIF, and that individual would like to
     IFIC and The American Chamber of Commerce          make the election for the 2002 tax year, he or
     in Canada met with U.S. Treasury and IRS offi-     she may make the election by filing an
     cials to propose a streamlined tax reporting       amended 2002 return in the appropriate for-
     system for RRSPs and RRIFs. Additionally, a        mat up to October 15, 2003.
     press release outlining the issue was distrib-
     uted on 8 July, which resulted in some sup-        The IDA will continue to work on behalf of its
     portive articles. The individuals in the           Members to advocate less onerous reporting
     delegation were Jamie Golombek of AIM              requirements to U.S. tax authorities. Member
     Trimark (representing IFIC), Jim Yager of          firms interested in further information on this
     KPMG LLP and Morag MacGougan of the IDA.           issue should refer to all 3 of the following Bul-
                                                        letins: 3158, 3177 and 3184.
     On August 1, the IRS issued a new notice (the
     August Notice) that provides some relief to        For more information, please contact:
     those who at least attempt to comply. How-         Morag MacGougan
     ever, those who ignore the filing requirements     Ontario Regional Director
     may still be assessed severe penalties.            (416) 943-6991 or mmacgougan@ida.ca.


14
Private Client                                    NRD Update
Conference Day                                    A NRD Operational Policy and Procedures
                                                  (OPP) Committee has been formed comprised
This year, our Annual General Meeting was pre- of IDA and CSA representatives. The mandate
ceded by our first Private Client Conference Day. of the OPP Committee is to make decisions
We started the evening before with dinner at the about administrative policy and procedural is-
Rossmount Inn. It proved to be an exceptional sues that arise through the shared use of NRD,
evening with great food and an opportunity to to ensure consistent and effective use of the sys-
get acquainted. The inn overlooks Minister’s tem by regulators.
Island where the railroad tycoon, Van Horne,
built a summer home in the late 1800s.            The IDA and CSA announced several important
                                                  changes to alleviate workload demands during
Just short of 50 people registered for the semi- the NRD transition period. The anticipated
nar which began at 8:00 a.m. on Saturday and workload following the launch of the system has
ended at 5:00 p.m. The six speakers gave excel- been increased due to the problems with the data
lent presentations ranging from Marketing your converted to NRD from regulators’ legacy sys-
Brokerage Business to How money gets laundered in tems. The changes include the following:
the Securities Industry. Speakers included • A system enhancement allows easier cor-
Michael Lipkin of Environics Research Group;          rection of errors in registration and ap-
Duncan MacPherson, MacPherson & Associ-               proval categories.
ates Inc.; Chris Mathers, President, KPMG Cor- • Previously, any change to the registration
porate Intelligence Inc.; and Dr. Nancy Mathis,       information regarding an individual in-
Ph.D., President & CEO Mathis Instruments Ltd.        cluded in the converted data required a firm
Ralph Acampora, a lively technical analyst from       to update the individual’s complete infor-
Prudential Securities Inc., also provided a very      mation through NRD. Now this require-
entertaining presentation.                            ment is triggered only if the change is
                                                      material. This will allow firms to do most
Despite the beautiful weather and the sounds          of their updating during the April 2004 to
of folks splashing in the pool next to the meet-      March 2006 period during which all up-
ing room, the speakers kept us engaged and a          dates have to be completed so that they can
wealth of information was shared and ex-              better plan and control the updating.
changed throughout the course of the day. A • Deadlines for filing certain NRD submis-
survey dictated that the majority were not only       sions were extended to November 15, 2003.
glad they attended the seminar, but would en- • NRD standard reports are now available in
courage their colleagues to do so.                    editable format to help firms compare the
                                                      NRD data to their own internal records.
For more information, please contact:
David Beazley                                     In addition to these changes another release of
Atlantic Regional Director                        NRD is scheduled for early fall with further
(902) 423-8289 or dbeazley@ida.ca.                enhancements to the system.

                                                  For more information, please contact:
                                                  Lisa Anderson
                                                  Coordinator, NRD Project
                                                  (416) 943-6917 or landerson@ida.ca.


                                                                                                     15
     Intermediary                                         However, the proposed amendment will not
                                                          likely be implemented by the deadline.
     Obligations under                                    Accordingly, the IDA (on behalf of its Members)
                                                          will make an application to the CSA in the next
     National                                             few weeks to seek the required exemptive relief
                                                          to bridge the gap of time from the deadline until
     Instrument 54-101                                    the amendment comes into force.

     Communication with Beneficial                        A further notice will be issued by September
     Owners of Securities of a Reporting                  2003 to update the status of the exemptive re-
     Issuer                                               lief application.

     On July 1, 2002, National Instrument 54-101          For more information, please contact:
     Communication with Beneficial Owners of Securi-      Ian Russell
     ties of a Reporting Issuer became effective. (Mem-   Senior Vice-President, Industry Relations and
     ber Regulation Notice MR-0150, June 27, 2002).       Representation
                                                          (416) 943-6947 or irussell@ida.ca.
     National Instrument 54-101 requires that Mem-
     bers obtain certain instructions from clients
     who are beneficial owners of securities of re-       CDSX
     porting issuers as to whether they object to the
     disclosure of their personal information to the      Implementation
     reporting issuers and other third parties or,
     alternatively, wish to receive certain materials     Update
     from the reporting issuers.
                                                          Over the past six months, a working group of
     More particularly, since July 1, 2002, Members       the IDA Regional Dealers Committee has rep-
     are required to provide each new client (for         resented IDA Members in negotiations with ex-
     accounts opened after July 1, 2002) with an ‘ex-     tenders of credit and CDS surrounding the
     planation to client’ and a ‘client response form’,   move to a more modern clearing and settlement
     and obtain instructions from the client before       system called CDSX. The working group has
     holding securities on its behalf.                    been very successful at providing input and
                                                          encouraging revisions to the process that, in the
     Members who hold securities on behalf of cli-        end, benefited all market participants. The group
     ents in accounts that were opened before July 1,     was instrumental in the discussions that resulted
     2002, where the clients were deemed non-ob-          in all participants receiving value for BBB rated
     jecting beneficial owners (NOBOs) under former       debt and in the development of an approach to
     National Policy Statement 41 Shareholder Com-        capping central counterparty services that pre-
     munication, are required under the Instru-           vents one institution from introducing an unac-
     ment to obtain new instructions from all of these    ceptable amount of risk to the system while
     deemed NOBOs before January 1, 2004.                 treating all CDS participants equally.

     As compliance with the deadline may prove            CDS, after receiving regulatory approval (or
     difficult for some Members, the CSA is               non disapproval) for rule changes earlier in the
     proposing an amendment to the instrument to          week, used the weekend of July 19-20 to
     eliminate the requirement for Members to             convert approximately 5,000 securities from the
     obtain new instructions from deemed NOBOs.           old system into CDSX. CDS informed the

16
community that the partial conversion was a          The best practices and standards are the result
success and while there were a couple of issues      of over three years of work by industry volun-
that cropped up shortly after the conversion,        teers, including many staff members from the
they have been resolved and transactions             IDA. Joe Oliver sits on the CCMA board of
involving the 5,000 securities are settling on       directors, and the IDA is represented on the
schedule in CDSX. The next significant event         Program Steering Committee, Finance Com-
will take place during the weekend of August         mittee, Communication and Education Work-
22-23 where the remaining 30,000+ securities         ing Group and the Best Practices and Standards
will be converted into CDSX.                         Oversight Committee.

Once the full conversion has occurred, the           The CCMA followed-up on the June 9 an-
community will spend the next 12 months              nouncement with a June 17 Kick-Off Event,
(known as the transition period) discussing and      held in Toronto. Institutional best practices
negotiating the final version of the CDSX Risk       information sessions have also been held
Model. Some of the major topics to be                across the country. Comments from industry
addressed over the transition period include         participants were due by August 15, 2003.
formal solutions for assigning value to certain      Best practices and standards for retail trade
equity and debt securities, the development of       processing and dematerialization are to be
a portfolio approach to determining risk, and        published later this year, with all final best
more complete back-testing of the model that         practices and standards due to be published
will ensure the CDSX Risk Model collects             in December 2003.
sufficient collateral from participants to protect
the system yet is not too onerous that it            For a copy of the best practices and standards,
negatively impacts the competitive landscape         or for other information, please go to the STP/
of the Canadian capital markets.                     T+1 section of the IDA website, www.ida.ca,
                                                     under Industry Issues & Info.
For more information, please contact:
Ian Russell                                          For more information, please contact:
Senior Vice-President, Industry Relations and        Keith Rose
Representation                                       Senior Vice-President, Finance
(416) 865-3036 or irussell@ida.ca.                   & Administration
                                                     (416) 865-3022 or krose@ida.ca.
STP Update
                                                     CanPX
CCMA releases STP Best Practices
and Standards                                    Commissions in British Columbia, Alberta,
                                                 Ontario and Québec have approved and pub-
On June 9, the Canadian Capital Markets As- lished for public comment the recommenda-
sociation (CCMA) released best practices and tion that CanPX be designated as Information
standards for Straight-Through Processing, or Processor for corporate debt securities under
STP. The best practices and standards gov- National Instrument 21-101, Marketplace Opera-
ern interfaces between Canadian securities tions for a period of three years. The comment
market participants for institutional trade pro- period for all jurisdictions will end on Septem-
cessing, entitlements and securities lending. ber 11, 2003.
IDA President Joe Oliver participated in the
media conference announcing this major STP IRR staff, in conjunction with the IDA Capital
milestone.                                       Markets Committee and the CanPX Board,

                                                                                                       17
     played a key role in managing the CanPX trans-     Adopting the NASDR approach will promote
     parency project, meeting the regulatory re-        harmonization between U.S. and Canadian
     quirements to become the designated                rules. It will also permit U.S. research to be
     information processor and putting in place a       available in Canada and Canadian research
     sound business model for the corporation.          relating to Canadian firms to be distributed in
     Today, CanPX provides real-time pricing of all     the U.S., a result that will be positive for both
     Government of Canada treasury bills and            Canadian investors and Canadian corporations.
     bonds and provincial bonds traded through the
     inter-dealer brokers as well as a subset of cor-   Policy 11 will cover all securities, both equity
     porate bonds priced by the major dealers.          and debt, subject to a number of exceptions in
     Coverage includes real-time best bid and offer     the policy, while the NASD rule only applies
     price, size and yield along with real-time trade   to equity securities at the moment. While dif-
     data including size, yield and aggregate daily     ferences exist between fixed income and equity
     trade volumes. Available globally via the          markets, the potential for conflict exists in both
     internet at www.canpx.ca and via Moneyline         markets. Therefore, we see no justification in
     Telerate, CanPX is used daily by almost 4,000      principle to exempt fixed income research from
     subscribers, and discussions continue for ex-      Policy 11, although technical accommodations
     panding distribution via Reuters, ILX and          will be introduced.
     other vendors.
                                                        For more information, please contact:
     For more information, please contact:              Deborah Wise
     Ian Russell                                        Legal and Policy Counsel, Regulatory Policy
     Senior Vice-President, Industry Relations and      (416) 943-6994 or dwise@ida.ca.
     Representation
     (416) 865-3036 or irussell@ida.ca.
                                                        Need to order
     Policy 11—Analyst                                  brochures?
     Standards                                          Look to
     Policy 11 has been resubmitted to the securi-      www.ida.ca!
     ties commissions for a period of public review
     and comment following modifications ap-            A new page is coming soon to the Membership
     proved by the Board of Directors in June. The      in the IDA section of the website, called Order-
     policy is posted on the website at Regulation/     ing Brochures. Here you will find easy direc-
     Regulatory Proposals.                              tions and links for ordering or finding various
                                                        brochures and publications from the IDA.
     The Board of Directors approved an additional
     disclosure requirement at its June meeting. We     Member firms are required to provide their cli-
     have changed the proposed requirement that         ents with copies of the IDA’s Investor Protection
     firms must report ‘Pro Group’ holdings of over     for Clients of IDA Member Firms. The Ordering
     5% and instead adopted the approach of NASD        Brochures page includes instructions and links
     Rule 2711 that requires disclosure when a          for obtaining printed copies of the brochure,
     Member and its affiliates, but not its employ-     or the materials necessary to have the brochures
     ees, beneficially own 1% or more of any class      produced by a different supplier.
     of the issuer’s equity securities.


18
Instructions and links are also provided for or-
dering the Strip Bond Information Statement, an-
                                                   IDA Member
other required document. Please note that the
IDA has changed printers for the Statement.
                                                   Seminars
Other materials listed on the Ordering Bro-     The IDA will be holding Member seminars this
chures page include:                            autumn. The purpose of these seminars is to
• IDA door stickers                             educate financial staff of Member firms who
• Syndicate Practices Handbook                  are involved in financial filings, on regulatory
• Policy 5                                      issues. These seminars provide a forum to
                                                update Members on the latest issues in the in-
Here you will also find links to other IDA pub- dustry and provide Members with an oppor-
lications such as the IDA Report, and capital tunity to discuss relevant and topical issues
markets research papers.                        with the IDA staff.

Look for Ordering Brochures at www.ida.ca          This year, seminars will be held in Toronto on
under Membership in the IDA.                       September 4, in Calgary on September 19 and
                                                   in Montreal on October 14. The Toronto semi-
For more information, please contact:              nar will consist of a morning general session
Morag MacGougan                                    and afternoon workshops; the Calgary and
Ontario Regional Director                          Montreal seminars are structured as general
(416) 943-6991 or mmacgougan@ida.ca.               sessions.

                                                   Topics for the seminars include:
                                                   • Introducing Carrying Arrangements
                                                   • Web-based Financial Filings
                                                   • Common Examination Findings
                                                   • Custodial Agreements and Reconciliations
      The IDA’s pre-selected printer,              • CIPF Update
      The Graphicshoppe, has recently              • Regulatory Update
      developed a new order submis-                • Client Guarantees
      sion website, called OrderNet,               • Insurance Update
      found at www.ordernet.ca. First              • Business Continuity
      time users must fill out a profile           • Capital Deficiencies and Early Warning
      on the IDA registration page,                   Problems
      www.ordernet.ca/idaregister.asp,             • IDA website
      and will receive a UserID and Pass-          • Q & A Session
      word by email within 24 hours.
      For step-by-step instructions on             Paul Bourque, Senior Vice-President, Member
      using OrderNet, please visit the             Regulation will be the keynote speaker in
      Ordering Brochures page at                   Toronto.
      www.ida.ca.
                                                   For more information, please contact:
                                                   Maysar Al-Samadi
                                                   Vice-President, Professional Standards
                                                   (416) 943-6902 or malsamadi@ida.ca.




                                                                                                    19
     Member Services                                    The Role of Member
     IDA Member Services was represented this year
                                                        Regulation in Policy
     at the IDA Conference in St. Andrews by-the-
     Sea, New Brunswick. Information on all of the
                                                        Development
     programs negotiated by IRR staff with various
     vendors was on display at the Member Ser-          The IDA carries out a public interest mandate
     vices booth. The booth provided Member Ser-        to provide front-line regulation services on
     vices with the opportunity to showcase the         behalf of the public. This public interest man-
     price advantages of volume purchasing avail-       date includes the development of regulatory
     able to the IDA’s Member firms.                    policy, an important responsibility of all self-
                                                        regulatory organizations like the IDA. The
     A new national communications offering for         public interest is safeguarded by rigorously
     IDA Members was also launched in New               separating regulatory operations from other
     Brunswick. Member firms can now take ad-           parts of the organization. Technology systems
     vantage of group discounts, negotiated be-         maintain built-in internal firewalls. Non-regu-
     tween IDA Megatrade and Bell Canada in the         latory staff cannot access information belong-
     areas of audio conferencing, web conferencing      ing to regulation functions. These activities
     and webcasting. More information on these          have been structurally separated from the rest
     products will also be mailed out and will be       of the organization to ensure that regulatory
     available on the IDA website in the near future.   decisions are not inappropriately influenced
                                                        by the firms and individuals who are the sub-
     A reminder to IDA Members that the follow-         jects of those decisions.
     ing programs are available to IDA Member
     firms at preferred rates:                          Policy development, however, is not exclu-
     • Home & Auto* Insurance available through         sively and solely the purview of the Member
         The Personal Insurance Company                 Regulation Division. Effective regulation is
     • Employee Benefits Programs available             based on an intimate understanding of how
         through Baynes & White                         markets work in practice. Self-regulation
     • FIB Program through Marsh Canada                 makes industry expertise available to deal
     • Bell Mobility wireless package                   with specialized, technical issues and broad-
     • Megatrade Communication Services                 based policies. That’s an invaluable resource -
                                                        professionals who are uniquely positioned to
     We are also currently working on other excit-      deal with the question: how will it work on the
     ing opportunities to take advantage of the         ground? That is why not only Member Regu-
     Association’s purchasing power. If you have        lation staff contributes to policy development,
     any suggestions for programs you would like        so does the industry. (For a list of IDA policy
     us to investigate, please send us a message at     committees and membership please see
     memberservices@ida.ca.                             www.ida.ca/About the IDA.)

     *excluding Manitoba, Saskatchewan and BC due to    The objective of the IDA in the development
     government-run plans.                              of regulatory policies is the same as the
                                                        securities commissions - protect investors and
     For more information, please contact:              enhance the competitiveness of Canadian
     Eileen Brady                                       capital markets. As an SRO, the IDA can draw
     Member Services Coordinator                        upon the knowledge and expertise of IDA staff,
     (416) 943-6947 or ebrady@ida.ca.                   in both Member Regulation and Industry

20
Relations and Representation (IRR) as well as        policy development work. While consensus
its Members, organized regionally across             is important, that is not the objective of the
Canada as provincial District Councils and           policy development process. The objective is
issue-specific industry committees. This             to achieve the best regulatory balance. The key
expertise is different than the government           role of IDA staff is to develop, articulate and
regulatory agencies and, indeed, this is the         advocate informed, sensible policy positions.
value self-regulatory organizations bring to the
development of regulatory policy. This               For more information, please contact:
principle is enshrined in the preamble to the        Paul Bourque
Ontario Securities Act.                              Senior Vice-President, Member Regulation
                                                     (416) 865-3038 or pbourque@ida.ca.
However, due to the conflict inherent in self-
regulation, there must be checks and balances
on the regulatory development process to en-
                                                     Richard Corner
sure the appropriate balance is achieved. The        Appointed Vice-
first and most important check is the require-
ment of the Board to approve every policy in-        President,
strument. IDA staff and industry committees
have the power to recommend, but the Board           Regulatory Policy
decides. The policy development process pro-
vides for extensive consultation in order to         The IDA is pleased to announce the appoint-
achieve consensus. IDA staff works with indus-       ment of Richard Corner to the position of Vice-
try committees and CSA staff to accomplish this      President, Regulatory Policy.
objective. Consensus is generally achieved. In
this context, consensus usually means a rule that    Richard joined the IDA’s Regulatory Policy
is perfect in no one’s opinion but workable in       Department as Manager, Regulatory Policy, in
everyone’s. Consensus, while preferable, is not      February 1997 as a result of the merger of TSE
inevitable nor is it required. In those infrequent   member regulation functions with those of the
cases where consensus cannot be achieved the         IDA. Two years later he was promoted to Se-
differing IDA staff and committee views are pre-     nior Manager and a year following that to Di-
sented to the Board. The public directors on         rector, a role he has held for the past three years.
the Board play a key role in mediating the bal-
ance. There has never been an occasion in which      During his tenure in the Regulatory Policy De-
the eight public directors have been out voted       partment, Richard has been involved in the de-
on a public interest policy.                         velopment/amendment of a number of
                                                     significant financial compliance related rules.
In addition, the CSA Oversight Agreement pro-        Richard also represents the IDA on a number of
vides for a rule approval protocol. This re-         industry committees including those of the Ca-
quires all IDA public interest policies to be        nadian Investor Protection Fund, the Montréal
published for public comment and ultimately          Exchange, the Canadian Derivatives Clearing
approved by the CSA. This process guaran-            Corporation and the Canadian Depository for
tees that the IDA could never implement a            Securities Limited. To assist in the ongoing ef-
policy that was in the Members’ interests and        forts of the IDA to educate their Member firms
contrary to the public interest.                     and others on the rules of the IDA, Richard has
                                                     presented for the last six years at the annual
IDA staff bring professional qualifications in       Members and panel auditors seminars on rule
law and accounting as well as extensive              changes that have taken place during the year
industry and regulatory experience to all            and rule change initiatives that are underway.

                                                                                                            21
     Prior to joining the IDA, Richard worked at the
     TSE from March 1995 to January 1997 as Spe-
                                                        The Regions Report
     cialist, Capital and Margin Policy; a role simi-
     lar to the role he took on when he joined the      Atlantic Region
     IDA.
                                                        The major event in our region was, of course,
     Richard began his career as an auditor and         an Annual General Conference at St. Andrews
     worked in the financial institutions audit prac-   by-the-Sea. By all reports it was a success with
     tices of both Peat Marwick Thorne and Coo-         a good turnout, excellent speakers, and near
     pers & Lybrand for a period spanning nearly        perfect weather.
     ten years prior to joining the TSE. Richard re-
     ceived a Bachelor of Commerce degree from          Atlantic Canada has had its share of committees
     Queen’s University in 1985 and became a Char-      come here to discuss securities regulatory re-
     tered Accountant in 1989.                          form. In fact, the IDA participated in a panel
                                                        discussion at which an Inter-Provincial Securi-
                                                        ties framework was advanced by a steering com-
                                                        mittee of Ministers. The Wise Persons’
     National Advisory                                  committee also traveled to Halifax to try to de-

     Committee                                          termine if a National Securities Committee is
                                                        feasible. Both left with a better understanding
                                                        that any structure would have to take into ac-
     The National Advisory Committee 2003-2004          count that there are regional differences in our
     met on Sunday June 22, 2003 in St. Andrews         country, which dictate regional participation.
     by-the-Sea, New Brunswick. This year’s Chair
     is Debra Hewson, Odlum Brown Securities Ltd.     On June 16, the Province of Nova Scotia passed
                                                      legislation under the Securities Act which in-
     This year’s committee includes: Ronald Beer, cludes changes to the private placement rules.
     RBC Dominion Securities Inc.; Alan Dunnett, The additional exemptions are:
     RBC Dominion Securities Inc.; Brad Ens, CIBC 1) the private issuer exemption;
     Wood Gundy; Robert Jennings, Jennings Capi- 2) the family, friends and business associates
     tal Inc.; Nelson MacDonald, Citigroup Global         exemption;
     Markets Canada Inc.; Robert O’Hanley, CIBC 3) the accredited investor exemption;
     World Markets Inc.; Gérard Taillon, BMO 4) the offering memorandum exemption.
     Nesbitt Burns Ltée/Ltd.; John W. Fitzpatrick,
     TD Securities Inc.; and Tom Purves, Scotia Capi- The new exemption most likely to be used is
     tal Inc.                                         the offering memorandum exemption. It re-
                                                      quires the disclosure of considerable informa-
     Thank you to all District Council Chairs from tion about the issuer including a blunt reminder
     the 2002-2003 Committee for all of their contri- to the purchaser of some of the risks of invest-
     butions throughout the year. Special thanks ing, and that he/she may lose the entire invest-
     go to departing National Advisory Committee ment and may not be able to resell the securities.
     Chair Ray Smallwood, CIBC World Markets
     Inc. for his outstanding contributions.          In June, the Governor of the Bank of Canada,
                                                      David Dodge, spoke to the local Chamber of
     For more information, please contact:            Commerce and he and the Board of Directors
     Glenn Knowles                                    of the Bank hosted a dinner. Governor Dodge’s
     Pacific Regional Director                        speech was very frank and stimulated a great
     (604) 331-4797 or gknowles@ida.ca.               question and answer session.

22
Les O’Brien was recently appointed Chair of securities regulation in Canada, as part of the
the Nova Scotia Securities Commission. He consultations being conducted by the
was formerly Vice Chair and replaced Mr. Committee.
Robert MacLellan.
                                                   Subjects discussed included the passport sys-
Have a great summer.                               tem and the notion of a principal authority, the
                                                   processing of investor complaints, the registra-
For more information, please contact:              tion and enforcement process, and the Act re-
David Beazley                                      specting l’Agence nationale d’encadrement du
Atlantic Regional Director                         secteur financier (Bill 107).
(902) 423-8289 or dbeazley@ida.ca.
                                                   The Committee began its consultations in
Québec District                                    Vancouver last June 23 and these are continu-
                                                   ing across the country, in order to foster initia-
District Council 2003-2004                         tives that will encourage market
The Québec District held its annual meeting competitiveness, as well as investor protection.
on May 6 at the McCord Museum. Gérard
Taillon, Vice-President, Director, and Branch Annual Conference 2004
Manager at BMO Nesbitt Burns, has taken over The Québec regional office is proud to be the
the reigns as the new Chair. Mr. Taillon’s fo- host of IDA Members at the 88th Annual Gen-
cus is to ensure a balance between regulation eral Meeting and Conference, June 13-16, 2004
and the realistic practice of industry activities. at Mont Tremblant.
We also take this opportunity to extend our
most sincere thanks to Jacques Lemay, Imme- For more information, please contact:
diate Past Chair, who completed his two-year Carmen Crépin
term. His contribution to the IDA’s activities Vice-President, Québec
has been much appreciated.                         (514) 878-2854 or ccrepin@ida.ca.

Continuing Education                               Ontario Region
On May 29, over 60 investment advisors at-
tended a continuing education day, held in         Ontario District Annual Meeting
Québec City. Workshops covered estate plan-        The Ontario District Annual Meeting was held
ning, money laundering, income tax, and ad-        on Thursday, May 29 at the National Club in
visor liability under the complaints process.      Toronto. The regular meeting business was
Assistant Deputy Minister of Finance André         conducted and the nominees for the 2003 - 2004
Legault addressed a luncheon conference on         Council were announced.
Québec’s new support structure for the finan-
cial industry.                              By unanimous vote, the following individuals
                                            were elected to join the Ontario District Coun-
Another continuing education day is planned cil for 2003 - 2004: Brian Acker, Acker Finley
for September 25, 2003 for advisors in the Inc.; Mark Lyon, Hampton Securities Limited;
Montréal area.                              William McIlroy, Canaccord Capital Corpora-
                                            tion; David Prestwich, Dominick & Dominick
Presentation to the Ministerial Securities Inc.
Committee
On July 7 and 8, Québec District Chair Gérard Peter Deeb of Hampton Securities, the retiring
Taillon addressed the Ministerial Committee on Ontario District Council Chair, was thanked for
the subject of an inter-provincial plan for all of his contributions during the past year.

                                                                                                        23
     The ODC’s Chair for                                that it was very successful in its Council re-
     2003 - 2004 is Nelson                              cruitment efforts and will welcome eight new
     MacDonald          of                              members to SDC for the 2003-2004 council year.
     Citigroup Global
     Markets Canada Inc.                                Manitoba District
     The ODC’s Vice Chair                               In May, the IDA Executive returned to
     for 2003 - 2004 is                                 Manitoba for their annual visit. While in
     Daniella Dimitrov of Daniella Dimitrov and         Manitoba the Executive met with both the
     Dundee Securities Nelson MacDonald                 Manitoba Securities Commission and the pro-
     Corporation.                                       vincial government. In addition, they hosted
                                                        the annual Business Leaders Dinner in
     For more information, please contact:              Winnipeg.
     Morag MacGougan
     Ontario Regional Director                          During the visit the Manitoba District Council
     (416) 943-6991 or mmacgougan@ida.ca.               held its Annual Meeting as well as a very suc-
                                                        cessful Recognition Dinner. This year both ten-
     Prairie Region                                     ure and educational achievement were
                                                        recognized by the MDC.
     Alberta District
     The 2003 Alberta District Council Annual Meet-     The MDC hosted its Third Annual Charity Golf
     ing and Reception was held in May at the           Classic. The tournament raised over $22,000
     Calgary Petroleum Club. The ADC thanked            in support of the local Children’s Hospital
     outgoing Chair Dave Sanders for his work over      Foundation.
     the past two years and welcomed Rob
     Jennings of Jennings Capital as the incoming       For more information, please contact:
     Chair. In addition, Ruby Wallis of First En-       Terry Melling
     ergy was elected to the position of Vice-Chair.    Prairie Regional Director
     Over 60 people, including members of the           (403) 260-6278 or tmelling@ida.ca.
     ADC, local Branch Managers, staff of the
     Alberta Securities Commission, other special       Pacific Region
     guests and staff of the IDA, attended the recep-
     tion.                                              Presentation to CIRI
                                                        Warren Funt, Vice-President, Member Regu-
     The ADC is pleased to report that it will be       lation, Western Canada, addressed the Cana-
     hosting its golf tournament again this year. The   dian Investor Relations Institute on May 27 at
     event is scheduled for September 18 at Glen        their annual conference in Victoria, BC. He
     Eagles of Cochrane.                                spoke on the Association’s Policy 11 - Analyst
                                                        Standards.
     The District is also looking forward to hosting
     the Regional Dealers Committee Meeting,            Provincial Ministerial Review of Securities
     scheduled to be held in Calgary this Septem-       Regulation
     ber.                                               Alberta Minister of Revenue, the Honourable
                                                        Greg Melchin, recently chaired a series of
     Saskatchewan District                              provincial and territorial meetings regarding
     The Saskatchewan District Council held an In-      securities regulations in Canada and intra-
     dustry Luncheon in conjunction with the 2003       provincial regulatory framework. In late June,
     SDC Annual Meeting that took place in Saska-       Warren Funt made presentations to the British
     toon in May. The SDC is pleased to announce        Columbia, Alberta and Manitoba provincial

24
ministers responsible for securities regulations.
Other IDA executives made similar
                                                    The Committees
presentations in the other jurisdictions.           Report
Canadian Payments Association Annual
Conference                                     More information on IDA committees, including
Glenn Knowles, Pacific Regional Director, at- their mandate, composition and membership, is
tended the CPA’s Annual Conference held in available on the IDA website in the About the IDA
June. Glenn is a member of the CPA’s Stake- section.
holder Advisory Council as well as the H Rules
Working Group.                                 Compliance and Legal Section

Pacific District Council Elections                  The Compliance and Legal Section has struck
At the region’s Annual General Meeting held         a new sub-committee to examine amendments
in June, Neil MacDonald, First Associates In-       to Form No. 2, the New Client Application
vestments Inc. and Gordon Medland, Leede            Form. The Form will be redesigned to accom-
Financial Markets Inc. were elected as indus-       modate different types of accounts and busi-
try members to the Pacific District Council. In     ness structures such as institutional or discount
addition, the following industry members were       brokerage accounts.
re-elected: John Brighten, Global Securities
Corporation; Elizabeth Petticrew, BMO Nesbitt       The Ontario Securities Commission will be re-
Burns Inc.; Doug Salberg, Raymond James Fi-         leasing its Fair Dealing Model Concept Paper
nancial Planning Ltd.; Daniel Siu, Golden           shortly. The CLS anticipates preparing a de-
Capital Securities Ltd.; John Thompson, Union       tailed and comprehensive response.
Securities Ltd.; and Brian Worth, United Capi-
tal Securities Inc.                                The IDA is offering a seminar regarding the im-
                                                   pact of privacy legislation on August 19, 2003.
U.S. Criminalization of U.S. Securities The seminar will also be available via web cast
Law Seminar                                        on the IDA’s website. Privacy issues will be-
The Pacific Region will host a seminar, What to come of greater concern to Members as the fed-
do when the FBI calls, with securities lawyer pan- eral privacy legislation is scheduled to come
elists from New York and Washington, DC. into force on January 1, 2004. For more infor-
The seminar has been postponed to the fall due mation on the seminar please contact Morag
to the panelists’ work and travel commitments. MacGougan at (416) 943-6991 or Michelle
                                                   Alexander at (416) 943-5885.
For more information, please contact:
Glenn Knowles                                      For more information, please contact:
Pacific Regional Director                          Michelle Alexander
(604) 331-4797 or gknowles@ida.ca.                 Senior Legal and Policy Counsel, Regulatory
                                                   Policy
                                                   (416) 943-5885 or malexander@ida.ca.
          The IDA welcomes its
           newest Member firm:
                                                   Daily Survey of Money Market Rates
                                                   Committee
          ATB SECURITIES, INC.
                                                    The Committee met for the first time in June to
         Effective: July 8, 2003
                                                    discuss issues pertaining to the daily survey
                                                    of money market rates currently posted by

                                                                                                        25
     Moneyline on pages 3197 and 3198 and on the          Regional Dealers Committee
     Reuters CDOR page. The rates from this sur-
     vey are used to price Bankers’ Acceptances           The Regional Dealers Committee held a forum
     syndicates, as the reset rate for the swap mar-      as part of the IDA Annual General Meeting and
     kets, and as the settlement price for BAX (BA        Conference in St. Andrews by-the-Sea, NB. The
     futures) contracts listed on the Montréal Ex-        forum was co-chaired by Robert Caldwell of
     change. The Committee is made up of market           First Associates Investments Inc. and Ross
     participants, the Montréal Exchange and the          Sherwood of Odlum Brown Ltd. Mr. Caldwell
     Bank of Canada and is chaired by the IDA.            briefed everyone on the issues addressed by
                                                          the committee during the past year.
     At the meeting, Committee members reported
     that the survey results have been very stable over   The following presentations were made to the
     the past six months and the IDA noted that com-      Forum:
     plaints received had been minimal. The group         • Linda Hohol, President of the TSX Venture
     discussed the potential for an alternative rate         Exchange, spoke about the opportunities
     setting for the swap markets. The IDA commit-           for business growth using the exchange for
     ted to investigate whether there was enough             listings support and the benefits of using
     interest in this initiative to strike a working         the Capital Pool Program as an offering ve-
     group of swap market participants who would             hicle.
     debate the merits of using an alternative rate       • Rozanne Reszel, President and Chief Ex-
     setting for their markets. Minutes from the meet-       ecutive Officer of The Canadian Investor
     ing are posted on the IDA website.                      Protection Fund, updated the committee on
                                                             the coverage provided to their clients by the
     For more information, please contact:                   Fund.
     Chris Woolcock                                        • Roberta Wilton, President of the Canadian
     Financial Analyst                                       Securities Institute, outlined the strategic
     (416) 865-3037 or cwoolcock@ida.ca.                     direction of the CSI and the services pro-
                                                             vided to the dealer community.
     Capital Markets Committee                             • Peter Virvilis, Executive VP Operations,
                                                             Treasurer, Canaccord Capital Corporation,
     The Capital Markets Committee met on three              spoke on the topic of CDSX System X and
     occasions since the last IDA Report. Topics dis-        the issue of accommodating the concerns
     cussed included: updates to transparency and            of regional dealers.
     amendments to Companion Policy 21-101; the
     status of the CanPX application as Information       The program ended with a brief breakout ses-
     Processor; improvements to the Market Trade          sion during which time the dealer representa-
     Reporting System; an update on the proceed-          tives made suggestions on issues that should
     ings of the Money Market Survey Committee;           be addressed during the upcoming year.
     the RS Inc. Market Integrity Notice of May 2003
     pertaining to Listed Debt Securities; ranges for     The Regional Dealers Committee is planning
     Government of Canada auctions; and an up-            to hold its autumn meeting on September 18
     date on analyst disclosure requirements for          in Calgary.
     fixed income markets.
                                                          For more information, please contact:
     For more information, please contact:                Terry Melling
     Jon Cockerline                                       Praire Regional Director
     Director, Capital Markets                            (403)260-6378 or tmelling@ida.ca.
     (416) 943-5787 or jcockerline@ida.ca.

26
Regulatory Update                                  commission splitting and are suggesting that
                                                   one flat referral fee be permitted. The by-law
                                                   has been withdrawn.
New rules now in effect
                                                   Amendments to Advertising and Sales Literature:
Capital and Margin Requirements for Convertible    The Association has revised By-law 29.7 to in-
Securities: The proposed amendments seek to        clude in the definition a reference to electronic
modify the margin rules for convertible secu-      communication. The by-law has also been
rities to recognize that the maximum margin        amended to eliminate the requirement for prior
requirement for a convertible security should      approval of all correspondence and sales lit-
be closely related to the requirement for the      erature. The IDA has also prepared a draft
underlying security. The proposed changes          notice to offer guidance on this matter. The
were approved at the January 2002 Board and        Compliance and Legal Section reviewed and
the final approval was received from the secu-     approved changes to the by-law. The amend-
rities commissions on July 2, 2003. Bulletin       ments were approved at the October 2002
3174 was issued on July 18, 2003.                  Board and submitted to the securities commis-
                                                   sions for approval. The commissions provided
Upcoming rule changes                              additional comments that were discussed at
                                                   the May CLS meeting. The CLS decided to re-
Rules that will become effective in the coming     convene the subcommittee to discuss changes
months include:                                    to the by-law.

Definition of Approved Persons, By-law 1: The      Conflicts of Interest and Client Priority: A number
Association will be adding a definition of ap-     of incidents related to Members’ equity posi-
proved persons to By-law 1 in order to assist      tions in listed companies occurred late in the
Members when reviewing various rules in the        summer of 1996 that caused the industry to
IDA Rule Book that contain this term. The          convene the Joint Industry Committee on Con-
amendment was approved at the January 2003         flicts of Interest to review the issues and make
Board and IDA staff are awaiting securities        recommendations. The Committee’s Final Re-
commission approval.                               port was issued in September 1997 after con-
                                                   ferring with the SROs to confirm support for
Referral Arrangements: As a result of the CSA      the recommendations. A significant aspect of
Distribution Structures Position Paper, the IDA    the rule implementation is the required sys-
developed By-law 29.6A to address under what       tem modifications (required by the SROs and
circumstances referral fees and commission         Member firms to provide the capability to
splitting would be permitted. The proposed         properly monitor compliance with the rule
rules ensured compliance with the CSA Paper        changes). An earlier version of the client pri-
and clarified the Association’s current position   ority rule was approved at the October 2001
on these issues. The amendments were ap-           Board. The IDA has currently been working
proved by the IDA Board. After comments            with the securities commissions and exchanges
from Member firms, the IDA withdrew the by-        to jointly revise the conflicts of interest and cli-
law from CSA review in order to redraft it to      ent priority rules. The rules were approved at
broaden the permitted parties who may enter        the October 2002 Board and submitted to the
into referral arrangements. The amendments         securities commissions for approval. How-
were approved at the June 2002 Board and IDA       ever, based on comments received from Mem-
staff are now awaiting securities commissions      ber firms, the IDA is now contemplating a
approval. The staff at the OSC and ASC has         revision to the definition of “pro group.”
expressed concerns with permitting ongoing

                                                                                                          27
     Proposed Methodology for Margining Equity Secu-     Capital Trust Securities: Proposed amendments
     rities: A working group of the FAS Capital For-     to Regulation 100 have been developed to es-
     mula Sub-committee has developed an                 tablish specific rules relating to the margining
     improved margin rate methodology that tracks        of capital trust securities. The amendments
     an individual security’s market risk and sets a     were approved at the June 2002 Board. IDA
     margin rate for the security based on the mea-      staff are awaiting joint implementation with the
     sured risk. This proposed methodology de-           Montréal Exchange.
     termines market risk by measuring both the
     price risk and liquidity risk components of         Confirmations for Managed Account Transactions:
     market risk. The proposal was approved at           The objective to the amendment is to relieve
     the June 2001 Board and was approved in con-        Members from sending and customers from
     cept by the ASC, BCSC, OSC and SSC in Febru-        having to deal with confirmations that the cus-
     ary 2002. IDA staff are now in the process of       tomers do not want. Regulation 200.1(h) pro-
     developing a testing program to determine the       vides an exemption for accounts managed by
     potential impact of these proposals on IDA          external portfolio managers provided that the
     Member firms.                                       customer consents and a confirmation is sent
                                                         to the external portfolio manager. The pro-
     Capital Share and Convertible and Exercisable Se-   posed change was approved at the June 2003
     curity Offsets: The objectives of the amendments    Board and IDA staff are awaiting securities
     are to broaden the application of the existing      commissions approval.
     rules for such securities to include securities
     with cash payment features and to introduce        Amendment to the Insurance Requirements: A
     new rules that would permit offsets involving      housekeeping amendment to the insurance
     short positions in such securities. The amend-     requirements was made to remove all refer-
     ments were approved at the October 2002            ences to mail insurance under Regulation 400.2
     Board and by the securities commissions in         Financial Institution Bond Clause (C) - In Tran-
     May 2003. IDA staff are awaiting joint imple-      sit and Regulation 400.5(a). It will provide a
     mentation with the Montréal Exchange.              more concise definition of what must be cov-
                                                        ered under the financial institution bond and
     Swaps and Related Offsets: The objectives of the avoid confusion with respect to what must be
     amendments are to simplify the wording of the covered under mail insurance. The amend-
     existing rules relating to positions in and off- ment was approved at the January 2001 Board
     sets involving interest rate swaps and to intro- and approved by the securities commissions.
     duce new rules that would specify the capital IDA staff are now awaiting joint implementa-
     and margin requirements for positions in and tion with the Montréal Exchange.
     offsets involving total performance swaps. The
     amendments were approved at the October Broker-to-Broker Trade Matching Utility: The As-
     2002 Board. IDA staff are awaiting joint imple- sociation has revised Regulation 800 to facili-
     mentation with the Montréal Exchange.              tate Straight Through Processing (STP) for
                                                        non-exchange trades between Members. The
     Equity Derivatives and Related Offsets: The objec- industry, through the Canadian Capital Mar-
     tives of the amendments are to simplify, kets Association, is currently moving towards
     broaden the application of and correct known STP in order to remain competitive with U.S.
     errors in the existing rules and expand the num- markets and to reduce the costs and risks in-
     ber of offsets available through the introduc- herent in current settlement systems and pro-
     tion of new rules. The amendments were cesses. This is to be accomplished by
     approved at the April 2003 Board and IDA staff mandating the use of the new Broker-to-Bro-
     are awaiting securities commissions approval. ker Trade Matching Utility for non-exchange

28
trades. The amendments were approved at the      Beneficial Ownership: Current rules and indus-
October 2002 Board and submitted to the se-      try practice require those authorized to trade
curities commissions for approval. The IDA       on behalf of corporations, trust and similar
has responded to the comments received from      entities to be identified and documented.
the commissions.                                 Regulation 1300 has been amended in order to
                                                 address the issue of the need to know the ben-
Discretionary vs. Managed Accounts: The Sub-com- eficial owners behind corporate accounts. The
mittee of the Compliance and Legal Section proposed Regulation was approved by the
(CLS) drafted amendments to Regulation 1300 June 2003 Board and has been submitted to
to separate the characteristics of discretionary securities commissions for approval.
and managed accounts. The line between these
two types of account structures has been blurred Day Trading: Prior to the development of these
over time and, as a result, a hybrid discretion- proposals, there were no by-laws or regula-
ary account has been proposed, which contains tions that addressed the unique issues that arise
controls to ensure appropriate checks and bal- with respect to day trading. As there were a
ances are in place. The amendments were ap- number of day trading promoting firms seek-
proved at the June 2001 Board. The securities ing membership in the Association and day
commissions provided comments on the pro- trading is an extremely risky activity, the need
posed amendments to which IDA staff re- for rules specific to the unique investor pro-
sponded. The securities commissions have now tection concerns relating to day trading was
provided additional comments, in particular, apparent.
that the proposed amendments will increase the
ease for a Member to operate permanent dis- The proposed regulations delineate the duties
cretionary accounts that are, in essence, man- of a Member firm with respect to:
aged accounts. The IDA will be submitting a • ensuring that a day trading account is ap-
response to these comments shortly.                  propriate for a particular client before the
                                                     opening of such an account
Managed Accounts: The Managed Accounts sec- • warning clients of the risks associated with
tions of Regulation 1300 have been revised by        day trading
the Portfolio Management/Managed Accounts • protecting the client from financial loss
Sub-committee. The revisions make the appli-         through the implementation of strict lever-
cation of Regulation 1300 to accounts managed        age limits, in the form of margin require-
by sub-advisers plain. The revisions also            ments.
change the Portfolio Management Committee’s
function to an annual review of policies and The proposed Regulation 2500 was approved
procedures. In addition, the regulation has at the June 2001 Board and submitted to the
clarified and simplified the requirements for securities commissions for approval. The com-
reviews of managed accounts, including per- missions provided additional comments and
mitting reviews on an aggregate basis of ac- the IDA is currently preparing a response
counts for which investment decisions are based on comments received.
made centrally and applied over a large num-
ber of accounts. The proposed rules were ap- Policy 1 - Relationships Between Members and Fi-
proved at the October 2001 Board. The nancial Services Entities: Sharing of Office Premises:
securities commissions provided comments on The Association has revised Policy 1 now that
the proposed amendments to which IDA staff the securities commissions’ Principles of Regu-
responded. The securities commissions have lation, upon which Policy 1 was based, have
now provided additional comments and the been revoked and replaced with a consider-
IDA will be submitting a response shortly.       ably simplified National Instrument 33-102

                                                                                                    29
     Regulation of Certain Registrant Activities.        type. The amendment has now been approved
     The revised policy will remove many provi-          in concept by the securities commissions. The
     sions, such as the requirement that Member          next step will be the performance of industry
     firm branches situated in a financial institution   testing to determine the potential financial/
     be physically separated and have separate           operational impact of this proposal on Mem-
     signage. The policy now primarily addresses         ber firms.
     the issue of the sharing of premises between
     investment dealers and mutual fund dealers,      Capital Requirements Relating to Custodial Ar-
     insurance companies and other entities. The      rangements: Proposals have now been finalised
     proposed policy was approved at the June 2003    to amend the current capital requirement for
     Board and IDA staff are awaiting securities      the situation where a custodian would other-
     commissions approval.                            wise qualify as an acceptable securities loca-
                                                      tion, except for the fact that the Member firm
     Minimum Standards for Institutional Accounts: has not entered into a written custodial agree-
     Policy 4 has been prepared by the CLS Institu- ment with the custodian. It is believed that
     tional Issues Sub-committee. The policy will these proposed revised capital requirements
     set out the minimum industry standards as they are more reflective of the risk of not having a
     relate to institutional account supervision. The custodial agreement in this situation, but that
     policy was approved at the April 2003 Board they still provide a sufficient incentive to the
     and IDA staff are awaiting securities commis- Member firm to execute the standard custodial
     sions approval.                                  agreement. The amendments were approved
                                                      at the October 2002 Board and approved by the
     Analyst Standards: Based on the recommenda- securities commissions. IDA staff are await-
     tions put forth by the Crawford Report, the ing joint implementation with the Montréal
     Association has drafted Policy 11. It was ap- Exchange.
     proved at the June 2002 Board and submitted
     to the securities commissions for approval. The For more information, please contact:
     commissions and IDA Member firms provided Richard Corner
     additional comments and the IDA has prepared Vice-President, Regulatory Policy
     a response based on comments received. A re- (416) 943-6908 or rcorner@ida.ca.
     vised version of the policy was approved at
     the April 2003 Board and IDA staff are await-
     ing securities commissions approval. An
     amended version was approved at the June
     2003 Board, and has been submitted to the com-
     missions for approval.                                Stay Up-to-Date on IDA
     Account Concentration Charge: The proposed
                                                               Policy Developments
     amendments to Form 1 – Proposed Schedule
     15 will establish limits on an IDA Member               Visit the Regulation section
     firm’s exposure to one or more arms-length                at www.ida.ca to access
     counterparties. Exposures incurred in excess                   the most recent
     of these limits will trigger a capital charge to           Regulatory Updates
     the Member firm that is representative of the
     increased risk due to concentration. The charge
                                                                          &
     will apply to all counterparties and not just            Regulatory Proposals.
     “acceptable institutions” as concentration risk
     may arise in dealings with any counterparty

30
Enforcement:                                             the period from November 1999 to April 2000,
                                                         it failed to maintain adequate supervisory pro-
Disciplinary                                             cedures at the North Toronto branch by failing
                                                         to ensure that the branch manger was conduct-
Decisions                                                ing proper account supervision related to R.S.’s
                                                         trading activities.
As a national self-regulatory organization of the Ca-
                                                         Penalty: $65,000 fine; $20,000 costs.
nadian securities industry, the IDA enforces rules
and regulations regarding the sales, business and fi-
                                                         Gerrardo (Jerry) Salvatore
nancial practices of its Member firms. Investigating
                                                         (No. 3143/03)
complaints and disciplining Members are part of the
                                                         Violation: Mr. Salvatore acknowledged that
IDA’s regulatory role.
                                                         during January 1998 he failed to exercise due
                                                         diligence to ensure that recommendations
The IDA’s Enforcement Department may conduct an
                                                         made for the transfer of a client account were
investigation of a Member firm or registered person as
                                                         appropriate for the client and in keeping with
the result of an investor complaint, or where it is con-
                                                         the client’s investment objectives.
sidered necessary or desirable to ensure compliance
                                                         Penalty: $10,000 fine; $5,000 costs.
with IDA by-laws, regulations or policies. A Member
firm or registered person can be summoned to a hear-
                                                         Garry Turpin
ing and, if it is found that a violation has occurred,
                                                         (No. 3144/03)
disciplinary penalties may be imposed. Whenever the
                                                         Violation: Mr. Turpin acknowledged that dur-
IDA takes a disciplinary action against a Member firm
                                                         ing January 1998 he failed to properly super-
or registered employee, notice of the penalty is pub-
                                                         vise the handling of the account of a client, to
lished in the form of a Disciplinary Bulletin distrib-
                                                         ensure that recommendations made in regard
uted to securities regulators and the media.
                                                         to the transfer of the client’s account by Mr.
Robert Roy Morrison                                      Salvatore, a Registered Representative Op-
(No. 3141/03)                                            tions, were suitable for the client.
Violation: Mr. Morrison acknowledged that: Penalty: $15,000 fine; $5,000 costs.
• from November 1998 to April 2000, he failed
    to maintain written evidence to support the Shofique Ahmed
    monthly and daily supervision of client (No. 3145/03)
    accounts related to a certain registered rep- Violation: Mr. Ahmed acknowledged that:
    resentative.                                         • on or about October 21 and November 8,
• from November 1999 to April 2000, he failed                 2001, he misled three clients as to the value
    to properly supervise the trading activity                of their accounts.
    in nine accounts of five clients of a certain • on August 13, 2001, he borrowed funds
    registered representative to ensure that the              from a client, without the knowledge, con-
    recommendations made were appropriate                     sent or authorization of the Member firm.
    for the clients and in keeping with their in- Penalty: $10,000 fine; re-write CPH; filing of
    vestment objectives.                                 monthly supervision reports by any Member
Penalty: $35,000 fine; re-write Branch Manger’s employer for 12 months following any re-ap-
examination; prohibition of re-approval to act proval; $5,000 costs.
in any supervisory capacity for a period for
three years; $4,000 costs.                               Zona Paulette Armstrong
                                                         (No. 3155/03)
Scotia Capital Inc.                                      Violation: Ms. Armstrong:
(No. 3142/03)                                            • failed to exercise due diligence to ensure
Violation: Member firm admitted that during                   that the recommendations made for

                                                                                                              31
        numerous client accounts were appropriate        funds and misappropriation in several clients’
        for the clients and in keeping with the          accounts, falsification of documents, forging
        client’s investment objectives;                  signatures and of having deceived a client by
     • failed to learn the essential facts or failed     concealing her funds’ misappropriation.
        to update the essential information in cli-      Penalty: Permanent bar; $585,000 fine; $9,685
        ent account documentation relative to two        costs.
        client accounts;
     • prepared price lists used by Nesbitt for the      Gaston English
        purposes of pricing certain U.S. corporate       (No. 3161/03)
        debt securities for clients’ month end state-    Violation: Mr. English was found guilty of 43
        ments, and on at least three occasions, the      violations, namely:
        prices of at least three of the securities ap-   • on instructions of a third party, he executed
        pearing on the price lists were inflated, and       a trade on behalf of an Indonesian resident
        therefore, materially, incorrect; and               before an account was opened in the client’s
     • failed to fully cooperate with the investi-          name;
        gation conducted by the Association’s En-        • by opening client accounts on behalf of five
        forcement Department.                               Indonesian residents at the request of a third
     Penalty: Permanent bar; $205,000 fine; $241,000        party and without having communicated
     disgorgement of commissions; $50,000 costs.            with the clients, he failed to use due dili-
                                                            gence to learn the essential facts relative to
     Paul Mark Herd                                         each client and to the acceptance of each ac-
     (No. 3157/03)                                          count; failed to complete a new account form
     Violation: Mr. Herd admitted that he:                  for each of them containing the minimum
     • engaged in conduct unbecoming a regis-               prescribed information; failed to obtain valid
        tered representative by trading excessively         written powers of attorney authorizing a
        in his client’s Canadian Dollar Margin Ac-          third party to give trading instructions for
        count for the purposes of earning commis-           these accounts and by agreeing to sell a sig-
        sions;                                              nificant number of securities in these ac-
     • engaged in conduct unbecoming a regis-               counts, at the request of an insider of the
        tered representative by being less than             issuer of the securities in question, failed to
        forthright with the management of his Mem-          use due diligence to ensure that the accep-
        ber firm as to the extent of his client’s par-      tance of these orders was within the bounds
        ticipation in the trading activity being            of good business practice;
        undertaken in his account; and                   • opened accounts in the names of two cor-
     • exercised discretion in effecting trades in          porate entities without having completed
        his client’s Canadian Dollar Margin Ac-             a new account form containing the mini-
        count, in respect of which the client had not       mum prescribed information and without
        given his written authorization for the ex-         having obtained a certified true copy of a
        ercise of such discretion and which had not         resolution of the corporations authorizing
        been accepted as a discretionary account.           the opening of an account and agreed to
     Penalty: $30,000 fine; $50,000 disgorgement of         execute trades in the accounts, on instruc-
     commissions; re-write CPH; $5,000 costs.               tions of a third party, without first having
                                                            obtained a resolution from the corpora-
     Warren J. McCaffrey                                    tions authorizing the third party to place
     (No. 3151/03)                                          orders on those accounts;
     Violation: Mr. McCaffrey engaged in conduct         • opened an account in the name of a chari-
     unbecoming or detrimental to the public inter-         table foundation, on instructions from a
     est by engaging in nine counts of diverting            third party, without having obtained a cer-

32
    tified true copy of a resolution of the direc-        sential facts relative to accounts accepted
    tors of the foundation authorizing the open-          for five clients, allowed accounts for seven
    ing of the account and a resolution enabling          clients to be opened without sufficient
    specifically designated persons to deal with          documentation and failed to establish ad-
    the account;                                          equate procedures to supervise the open-
• by signing in his capacity as the person re-            ing of client accounts by allowing the
    sponsible for supervising the opening of              opening of these accounts to be approved
    accounts, approved the opening of seven               and ratified by the person who had opened
    client accounts for which he, as a registered         these accounts in an inappropriate manner;
    representative, had incorrectly completed         •   failed to use due diligence to ensure that
    the new account forms;                                the acceptance of orders by Gaston English
• accepted instructions from a third party to             for the accounts of seven clients was within
    transfer assets held in the accounts of two           the bounds of good business practice and
    clients to other accounts, without first hav-         to ensure that the handling of client busi-
    ing obtained a valid power of attorney for            ness by Gaston English for ten clients was
    such purpose;                                         within the bounds of ethical conduct, con-
• failed to ensure monthly statements of ac-              sistent with just and equitable principles of
    count containing all prescribed information           trade and not detrimental to the interest of
    were produced for the accounts of several             the securities industry:
    clients;                                          •   failed to maintain at all times a proper
• opened accounts in the names of three cor-              system of books and records relating to
    porate entities having their place of busi-           client accounts and to trading activity
    ness in Alberta, two individuals residing             within those accounts;
    in Alberta and five individuals residing in       •   engaged in business conduct which is un-
    Indonesia, although he did not hold any               becoming in that, at the request of an in-
    registration authorizing him to carry on ac-          sider, it allowed securities to be held in the
    tivities in such jurisdictions;                       name of Resolution Capital Inc. at General
• at the request of an insider, allowed securi-           Trust, without any counter party being re-
    ties to be deposited in the name of Resolu-           corded in its books and, without the corre-
    tion Capital Inc. at General Trust and                sponding entries being made in the
    partially withdrawn the same day to settle            appropriate records, it then allowed part of
    the sale of the said securities in the accounts       the said securities to be withdrawn to settle
    of the insider’s two sons held with the Mem-          the sale of the said securities in the accounts
    ber, allowed an additional number of se-              of the insider’s two sons held with Resolu-
    curities to be deposited therein and then             tion Capital Inc., it allowed securities to be
    withdrawn for delivery to said insider and            received in that account and then withdrawn
    allowed securities to be held therein on              for delivery to a third party and it allowed
    behalf of a foundation, without correspond-           the remaining securities to be held therein
    ing entries being made in the Member’s                in the name of Resolution Capital Inc.;
    books and records.                                •   while not holding any registration as a
Penalty: $50,000 fine; re-write CPH and the               dealer in such jurisdictions, it allowed its
Partners, Directors and Senior Officers Quali-            representative, who was also not authorized
fying Examination; $22,000 costs.                         in such jurisdictions, to open accounts with
                                                          the respondent in the name of three corpo-
Resolution Capital Inc.                                   rate clients having their places of business
(No. 3161/03)                                             in the province of Alberta, two individuals
Violation: The Member firm:                               residing in the province of Alberta and five
• failed to use due diligence to learn the es-            individuals residing in Indonesia and to

                                                                                                            33
        make trades in such accounts;                     •  operated a client account in the name of a
     •  allowed its representative, acting on the in-        trust that had been terminated and used the
        structions of a third party, to execute a trade      account to carry out his personal trading;
        in the name of an Indonesian resident, with-      • directed client correspondence to various
        out an account being open in that name;              addresses, including his personal address;
     • failed to produce, for the accounts of nine        • engaged in unauthorized trading in a
        clients, monthly statements of account con-          client’s account;
        taining all of the prescribed information and     • failed to disclose his interest in a number
        it completely failed to produce such state-          of client accounts;
        ments for the account of a foundation.            • carried out transactions without benefit to
     Penalty: $50,000 fine; $22,000 costs.                   the trading parties, and which had the re-
                                                             sult of overstating SJS’s capital position;
     Mark Julian Klyman                                   • fixed prices for four securities that were not
     (No. 3163/03)                                           fair market prices for those securities;
     Violation: Mr. Klyman admitted that between • effected transactions between SJS inventory
     August 1999 to October 1999, he exercised dis-          accounts and corporations controlled by
     cretion in effecting trades for a client in accounts    him that were not within the bounds of good
     in respect of which the client had not given            business practice and which unduly
     written authorization and the Member firm had           prejudiced SJS’s capital position;
     not accepted as discretionary accounts.              • failed to exercise due diligence to ensure
     Penalty: $5,000 fine; $858.34 disgorgement of           that all necessary account documents were
     commission.                                             obtained and complete;
                                                          • traded in registered debentures between
     Ramon Albert Porcellato                                 client and non-client accounts while the
     (No. 3160/03)                                           debentures were not in a tradable form;
     Violation: Mr. Porcellato admitted that:             • conducted trading in client accounts with-
     • between November 2000 and January 2001,               out funds and allowed accounts to trade for
         he effected trades for himself in the account       a prolonged period of time without ad-
         of a client with the knowledge and consent          equate margin;
         of the client, but without the knowledge and • traded in a corporate client’s account for
         consent of the Member firm;                         several months prior to the client’s incor-
     • in or about January 2001, he misled the               poration; and
         Member firm regarding the nature of deb- • failed to question documents purportedly
         its in the account of a client; and                 signed by clients that appeared, on their
     • between November 2000 and January 2001,               face, to be forgeries.
         he entered false or misleading foreign ex- He also carried out discretionary trading in a
         change rates on trade tickets for trades he ef- client’s account, from 1997 to 1999.
         fected for himself in the account of a client.   Penalty: Permanent bar; $300,000 fine; $125,000
     Penalty: $45,000 fine; 12 months strict super- costs.
     vision; re-write CPH; $5,000 costs.
                                                          Winnie W.S. Tang
     John James Illidge                                   (3167/03)
     (No. 3165/03)                                        Violation: Ms. Tang admitted that she failed
     Violation: Mr. Illidge admitted that between to observe the high standards of ethics and con-
     1997 and 1999 he:                                    duct in the transaction of business conduct or
     • opened an account in the name of a a practice which was unbecoming and not in
         fictitious corporate client for the purpose the public interest by misappropriating funds
         of concealing his own trading activities;        from the Member firm to client accounts, in-

34
cluding her own.
Penalty: Permanent Bar; $150,000 fine; $25,000
costs.

For more information, please contact:
Alex Popovic
Vice-President, Enforcement
(416) 943-6904 or apopovic@ida.ca.




   IDA REP RT
 The IDA Report is published four times a year
 by the Investment Dealers Association of
 Canada, Public Affairs Department. We wel-
 come feedback. Please send correspondence
 to:
                 Connie Craddock
           Vice-President, Public Affairs
         121 King Street West, Suite 1600
            Toronto, Ontario M5H 3T9
     Tel: (416) 943-5870 Fax: (416) 364-0753
             Email: ccraddock@ida.ca

 The Investment Dealers Association of
 Canada is the national self-regulatory or-
 ganization and representative of the secu-
 rities industry. The Association’s mission
 is to protect investors and enhance the ef-
 ficiency and competitiveness of the Cana-
 dian capital markets.

                                                 35
                                                                                           INVESTMENT
                                                                                           D E A L E R S
                                                                                           ASSOCIATION
                                                                                           ASSOCIATION
                                                                                           OF CANADA

                                                                                             www.ida.ca
                                                                                             www.ida.ca




                                                                                           Info/Complaint Line
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Ce rapport est aussi disponible en français sur demande.                                   Vancouver, BC
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The Investment Dealers Association of Canada is the national self-regulatory               Tel.: (604) 683-6222
organization and representative of the securities industry. The Association’s mission is   Fax: (604) 683-3491
to protect investors and enhance the efficiency and competitiveness of the Canadian
capital markets.                                                                             Printed on recycled paper
                      A newsletter published by the
                Investment Dealers Association of Canada

RT        Representing Members’ Interests
          The Investment Dealers Association is actively involved, on a regular and ongoing basis, in
          representing Members’ concerns and interests to governments and other organizations. Since
          our last issue, the IDA has been active on a number of fronts.

          House of Commons Finance Committee

          The IDA was invited to appear before the House          ·   meet with the Alberta Securities
          of Commons Finance Committee regarding Bill                 Commission and
          C-38, an omnibus bill containing amendments             ·   meet with the Hon. Steve West,
          to federal financial legislation. In his brief to the       Treasurer, Government of Alberta.
          Committee (available on the IDA web site at
          www.ida.ca) IDA President and CEO Joe Oliver            For more information, please contact:
          urged the government to move quickly to                 Terry Melling
          introduce legislative and regulatory amendments         Prairie Regional Director,
IDA REP

          that would enable securities firms to join the          (403) 262-6393 or tmelling@ida.ca
          Canadian payments system at the earliest
          opportunity. He also called on the government           CSA Transparency Proposals for
          to develop a coordinated federal-provincial             Debt Markets
          approach to their proposed client adjudication
          system that is cost-effective and uniform,              The CSA proposals for reform of domestic
          benefiting clients dealing across the institutional     markets released July 31 separate debt and
          spectrum in Canada, and minimizing costs for            equity markets in respect of imposing
          financial institutions, including IDA Member            regulatory policy. The proposals for the
          firms. What should be avoided, he said, is a            debt markets focus principally on efforts
          limited system that fails to cover all consumers        to improve the transparency of over the
          but nevertheless duplicates other systems already       counter debt markets.In the CSA Proposals
          in place. He concluded that the proposed federal        for regulating debt and equity markets
          Ombudsman is not needed to compete with the             released last July, CSA staff set out
          existing IDA arbitration system for the securities      specific proposals for domestic debt
          industry, but rather should be structured to            markets that focussed primarily on market
          complement it.                                          transparency and market integrity.

          Executive Committee Visits                              The transparency proposals were
                                                                  controversial and unconventional, as full
          An Executive Committee visit to Alberta is              real time transparency was proposed for
          scheduled for November 21-23, 2000. IDA Board           prices and transaction volumes in the IDB
          Chair Jacques Ménard and CEO and President              markets, as well as in market-maker books
          Joe Oliver, accompanied by Prairie Regional             and from alternative trading systems.
          Director Terry Melling and Senior Vice-President        Foreign jurisdictions have essentially
          Capital Markets Ian Russell, are scheduled to:          restricted transparency initiatives on the
          · meet with IDA Members in Edmonton and                 IDB or wholesale markets.
             Calgary,
          · host a Business Leaders Luncheon in                   The IDA and Bank of Canada have raised
             Calgary,                                             objections to the CSA transparency
    proposals, noting in particular that the pre-trade and   For more information, please contact:
    post-trade transparency of traded prices and volumes     Ian Russell
    from market-makers, in real time, increase risk          Senior Vice-President, Capital Markets
    exposure to the dealers, reduce a willingness to make    (416) 865-3036 or irussell@ida.ca
    two-way markets and result in higher transaction
    costs. CSA staff have acknowledged these arguments       IDA Efforts to pursue an RRSP Exemption
    and are seeking an acceptable transparency               in the United States
    compromise that can provide extensive debt market
    transparency without the negative impact on over-        The IDA has been active in encouraging individual
    the-counter dealing.                                     US states to provide the necessary regulatory relief
                                                             that would permit Canadian broker-dealers to deal
    The IDA Capital Markets Committee and Primary            with the securities, including Canadian securities and
    Dealer Money Market Committee agree that                 mutual funds, in the RRSP accounts of their clients
    effective transparency of the over-the-counter           resident in those particular states. Twenty US states
    markets is a necessary condition to promote liquid       have adopted the necessary securities exemptions
    and efficient markets. In this regard, IDA Member        under state law, recognized and adopted by the
    firms have been, and continue to be, committed to        NASAA Amendments to the Uniform Securities Act,
    improving the transparency of debt markets through       and provided Canadian dealers with limited
    participation in the CanPx project. The Committees       registration procedures or exemptions to transact
    believe the optimal policy approach is to finalize the   business in the RRSP accounts of their clients.
    planned CanPx project, which will be fully
    operational by year-end.                                 The state of Arizona recently issued for comment a
                                                             proposal for relief for Canadian broker-dealers in
    The Committees have formed a Transparency                respect of the RRSP accounts of their clients resident
    Working Group comprised of senior executives             in Arizona. The proposed rules do not provide the
    responsible for the fixed income operations of IDA       necessary exemption for Canadian securities in the
    Member firms to work with the CSA to develop an          RRSP accounts and would also provide Canadian
    effective transparency agenda for fixed income           dealers with a limited registration procedure rather
    markets in Canada.                                       than an exemption. The Association has submitted a
                                                             response to the Rules, arguing for an exemption and
    For more information, please contact:                    will take similar initiatives with other US states that
    Ian Russell                                              have not already agreed to the necessary securities
    Senior Vice-President, Capital Markets                   exemptions and Canadian broker-dealer exemption/
    (416) 865-3036 or irussell@ida.ca                        limited registration for transactions in RRSP
                                                             accounts. It is anticipated that California will issue a
    National Escrow Rules                                    similar proposal for some form of an RRSP
                                                             exemption. The IDA will follow up directly with
    In response to CSA proposals to reform existing          California regulators to press for the appropriate
    escrow rules, the Corporate Finance Committee            exemption. Submissions to the Arizona State
    recommended these rules be replaced with an              regulators are posted on the IDA web site at
    alternative mechanism that would not put domestic        www.ida.ca.
    markets at a competitive disadvantage vis-à-vis US
    equity markets. The Committee proposed a                 For more information, please contact:
    disclosure model patterned on the control block          Ian Russell
    selling rules. The CSA has to date rejected this         Senior Vice-President, Capital Markets
    proposal. Discussions are ongoing with the CSA, and      (416) 865-3036 or irussell@ida.ca
    the Committee is hopeful of a positive outcome.


2
Broadening the Exemption from Federal                     IDA Members’ Employee Benefits
Withholding Tax for Cross-Border
Repurchase Transactions
                                                          Plan

The Income Tax Act contains provisions that permit        The IDA is pleased to announce the implementation
Canadian dealers to borrow and lend US government         of a Benefits Plan to be used by Members of the
securities on a cross-border basis without the            Association, to cover their employees across the
imposition of federal withholding tax. US federal         country.
agency bonds have displaced US Treasury bonds as
the liquid benchmark securities in US debt markets.       The Plan has been designed with maximum
It has become increasingly difficult and expensive        flexibility to accommodate the uniqueness of our
to borrow US Treasury bonds for specific portfolio        Members while offering competitive pricing through
transactions. The IDA has made representation to          the combined purchasing power of the membership.
the federal Department of Finance to broaden the
exemption from federal withholding tax to include         The Plan offers:
US agency debt. This would enable Canadian dealers
and their clients to borrow securities in the US agency   Life and Disability Coverage
market and execute cross-border repurchase                ·   Wide range of life coverage with high non-
transactions in US dollar-denominated debt in an              medical maximums.
efficient and cost-effective way.                         ·   Comprehensive disability coverage with high
                                                              non-medical maximums.
For more information, please contact:                     ·   Dependent life coverage for Member employees’
Ian Russell                                                   spouse and children.
Senior Vice-President, Capital Markets                    ·   Employee-pay optional benefits for those
(416) 865-3036 or irussell@ida.ca                             choosing additional coverage.

Suitability                                               Health Coverage

The Association has submitted a proposal to the CSA ·         Comprehensive drug coverage with the
outlining our views on suitability for full service           convenience of a drug card (no claim for
brokers. The paper recommends a ‘trade-by-trade’              paperwork, no more waiting for cheques).
suitability regime very similar to that now in place ·        Unlimited health coverage including private and
in the United States. In this model, suitability              semi-private hospital coverage, practitioner
recommendations are only triggered when                       coverage, vision care benefits and extensive out-
recommendations are made. A separate account or               of-province and country coverage for all Member
business unit is not required.                                employees’ travel needs.

The IDA, through working sub-committees, has been         Dental Coverage
reviewing suitability requirements for its Members        ·   Complete dental coverage with flexibility to meet
over the past year. In April, 2000, the CSA provided          Members’ corporate needs.
relief from suitability requirements for discount         ·   Basic services including diagnostic
brokers and those Member firms that create separate           examinations, cleaning, scaling, fluoride
business units. This paper offers a proposal for              treatments.
further relief from suitability requirements for full-    ·   Major services including bridges, crowns and
service Members.                                              caps.
                                                          ·   Orthodontic coverage.
For more information, please contact:
Greg Clarke
Senior Vice-President, Member Regulation
                                                                                                                  3
(416) 865-3038 or gclarke@ida.ca
    Baynes & White, the consultant to the IDA on the Nova Scotia Securities Commission is considering
    Plan, are working with the Association to make delegating registration functions to the Association.
    personal contact with each Member firm. They can Each province has embraced a prudent fiscal strategy.
    be reached directly at:
                                                     Consultations across Atlantic Canada with the
    Phone          (416) 863-9159                    industry, business leaders, potential issuers, think-
    Toll Free      1-877-525-3623                    tanks like the Atlantic Provinces Economic Council,
    e-mail         info@bayneswhite.com              the professions, leaders in the media and others have
    _________________________________                yielded a substantial consensus that the Atlantic
                                                     provinces should adopt an integrated and uniform
    The Districts’ Report                            approach to capital market activities.

                                                            The evolution of the CDNX and Member
    Atlantic Region
                                                            involvement in local financings has created a new
                                                            appreciation for the potential contribution of the
    It has been a stimulating summer in Atlantic Canada.
                                                            industry in this region. Twenty-six companies in the
    Tall Ships, a re-enactment of the landing of the
                                                            region are listed and traded on the CDNX, and others
    Vikings in Newfoundland, and multiple cultural
                                                            have already graduated to the TSE and NASDAQ.
    events resulted in non-stop activity. The Atlantic
    District Councils launched their new years in a
                                                            One of the challenges going forward is to continue
    variety of creative ways.
                                                            to improve the delivery of services to Member firms
                                                            in the region. The IDA is now well known as a self-
    Following the IDA’s good news story issued about
                                                            regulator, but the trade association side is not as
    New Brunswick in the spring, the Association has
                                                            well known or understood by local Members.
    just published the outlook for Prince Edward Island,
                                                            District Councils will be meeting more frequently.
    and according to Stan Kumagai, our senior
                                                            They will be looking at ways to communicate more
    economist, PEI is “riding the crest of a surge in
                                                            effectively with Member firms and to enhance the
    economic growth”. A recent survey of Chambers of
                                                            profile of the industry in their districts.
    Commerce indicates increasing shortages of labour
    in a variety of categories. We participated with the
                                                            For more information, please contact:
    CSI recently in high quality career fairs for
                                                            Jim Stevens
    universities in Halifax and St. John’s, Newfoundland, Atlantic Regional Director
    and were pleasantly surprised at the number of (902) 423-8289 or jstevens@ida.ca
    employers competing for graduates, including local,
    regional, and large international companies. The
                                                            Ontario District
    economy of the region does appear to be
    experiencing structural changes, and this includes
                                                            The Ontario District has been busy this past summer
    the provinces which are not oil and gas producers.
                                                            dealing with issues that affect our region and the
                                                            industry as a whole. Below is a brief overview of
    On the legislative front New Brunswick has assigned
                                                            those issues. For more details, the relevant web site
    a high priority to enacting a modern securities act,
                                                            addresses have been provided.
    Newfoundland has activated its securities
    commission, Nova Scotia is about to announce                I. OSC / FSCO Merger Update
    changes affecting its securities commission, and
    Prince Edward Island has challenged us to make the          Finance Minister Ernie Eves has appointed his
    business case for updating its legislation. Nova Scotia     Parliamentary Assistant, David Young, to lead
    and Newfoundland have invited us to assist them
    with the delivery of equity incentive programs. The
4
consultations with consumers, investors, pension          Members instead of all IDA Members
plan members and industry participants regarding          individually, with regard to the August 2000
the Government’s plan to merge the Ontario                contract renewal for the sale of CSBs. The Retail
Securities Commission (OSC) and the Financial             Sales Committee struck a working group made
Services Commission of Ontario (FSCO) to form             up of representatives from Goepel McDermid
a single financial service regulator in Ontario.          Inc., Merrill Lynch Canada Inc., Odlum Brown
A discussion paper entitled “Improving Ontario’s          Ltd., and RBC Dominion Securities Inc. The
Financial Services Sector Regulation:                     negotiations resulted in an increase in
Establishing a Single Financial Services                  commission on the sale of CSBs from the
Regulator” is available on the FSCO web site at           previous 20 basis points to 23 basis points.
www.ontarioinsurance.com. The IDA has issued
a response to the Discussion Paper.                       V. Retail Sales Committee - New Chair
                                                             and Vice Chair
II. SRO Membership - OSC Rule 31-507
                                                          The Retail Sales Committee has appointed Tom
On August 18, the OSC published Rule 31-507               Monahan of CIBC World Markets Inc. to assume
which states that all securities dealers and brokers      the role of Chair, and Lorne Harper of Royal
must be a member of a SRO, recognized by the              Investment Services to serve as Vice Chair of
Commission. An existing securities dealer or              the Committee.
broker registrant must become a SRO member
as of the date of their first renewal of their         Our thanks to Gary Reamey of Edward Jones for all
registration following March 1, 2001. An               his work and input as Chair of the Retail Sales
                                                       Committee. Thanks also go out to Germain Carrière
existing securities dealer or broker registrant
                                                       for his work as Vice Chair and his continued support
must also provide the SRO with notice of its
                                                       as a member of the Retail Sales Committee.
intention to make an application for membership
by January 1, 2001.
                                                       For more information, please contact:
                                                       Morag MacGougan
The complete Rule can be found in the “What’s
                                                       Ontario Regional Director
New” section on the OSC web site at
                                                       (416) 943-6991 or mmacgougan@ida.ca
www.osc.gov.on.ca

III. Financial Planning Proficiency Exam               Pacific District

The pilot of the Financial Planning Proficiency        BC Business Summit 2000
Examination was written on Monday, October
                                                Giving businesses in British Columbia a voice to
2. The securities commissions asked the IDA,
                                                positively influence the business climate and social
along with other institutions, to elicit volunteers
                                                decision-making in the province, is the purpose of
from our Membership to write the exam and
                                                the BC Business Summit 2000 conference which
provide feedback.
                                                took place on November 18 and 19 in Vancouver.
                                                The BC Business Summit 2000 was organized by
Thank you to all who participated in this pilot
                                                52 business organizations and industry associations
exam.
                                                whose memberships collectively represent more than
                                                90% of all private sector employers in British
IV. Canadian Savings Bonds — Contract
                                                Columbia. Believing in the importance of the Summit
    Negotiations
                                                the IDA has been involved since 1998 and is active
                                                on numerous committees including the Steering
This year the federal government decided to Committee. Our District Council members have been
negotiate with a representative group of IDA
                                                                                                              5
    kept updated on the progress of the preparations of  Generally, it was agreed upon that there are many
    the Summit and were encouraged to attend. A          types of accounts where the standards of the Know
    complete outline of the Summit agenda can be found   Your Client rules are effective. However, the IDA’s
    on the IDA web site at www.ida.ca.                   proposal is to develop a concept of increased
                                                         monitoring of a defined group of “high-risk
    The conference gives businesses, small, medium and accounts”. Details still must be worked out on the
    large, the opportunity to voice their opinions and final policy as it goes through the normal policy
    concerns on various issues regarding conducting formulation process with the expertise and
    business in BC. The objective is to build on the suggestions from the industry.
    learning and the initiatives of the BC Business
    Summit ’98 and the Panel on Securing BC’s Future Regional News
    in 1999, and to provide input for a “forward looking
    vision” for the future of BC’s economic future.      The B.C. Women’s Hospital Foundation announced
                                                         the second quarter results for the annual “Invest in
    The need for economic growth and change in BC Women” Challenge. First time participant, Goepel
    was stressed by the various speakers including McDermid, leads its competitors for the second
    economists, demographers, pollsters and globalists. consecutive quarter.
    The keynote speaker for the opening session was
    Mary Harney, T.D. Tanaiste, (Deputy Prime The Challenge program was launched in 1997. Each
    Minister) and Minister for Enterprise, Trade and of the Challenge competitors sets aside a $100,000
    Employment for the Republic of Ireland. Ms. Harney portfolio that they will invest for a one- year period.
    has been central in the process of economic change Proceeds from all investments go to B.C. Women’s
    and renewal that has reshaped Ireland over the past Hospital Foundation. Since the program’s inception,
    decade making it the fastest growing economy in $192,492.82 has been raised.
    the European Union and the Western world. The line-
    up of other speakers was also very impressive, to Other participating financial service companies
    mention a few: former Olympic ski champion Nancy include: CIBC World Markets, HSBC Asset
    Greene Raine; David Baxter Executive Director of Management, Odlum Brown, Richmond Savings
    the Urban Futures Institute; Darrell Bricker, Investments and Toronto Dominion. “The kind of
    President and COO, Canadian Public Affairs Practice collaboration and healthy competition among B.C.’s
    at the Angus Reid Group. Others will include leaders established financial service providers has served
    representing the full spectrum of BC’s business B.C. Women’s Hospital well. Their support has
    community.                                           enabled us to expand and enhance our services to
                                                         meet the ever increasing demand,” says B.C.
    Vancouver Visits                                     Women’s Foundation Chair, Alan Snowden.

    Peter Bailey, Senior Vice-President, Trade             The Victoria, Vancouver Island members held their
    Association, was in Vancouver to visit with heads of   annual IDA golf tournament on September 7 at the
    our Member firms and attend a meeting with Doug        Cordova Bay Golf Course in Victoria. The day was
    Hyndman, Chair of the BCSC, Steve Wilson,              thoroughly enjoyed by 62 players, while raising more
    Executive Director of the BCSC and Warren Funt.        than $6,000.00 for the charity, “Help Fill A Dream
    The main focus for discussion was the very heated      Foundation”, an organization which helps fill the
    issue of the need to pierce the Corporate Veil and     dreams of terminally ill children and their families.
    determine beneficial ownership of offshore private
    companies. The outcome was successful in reaching      In August and September, Warren Funt travelled to
    a compromise satisfactory to both the BCSC and IDA     Victoria, Penticton, Kelowna, Vernon and Kamloops
    Members.                                               to meet with Members within their regions and to
                                                           present an update on industry developments. The

6
meetings were well received and the discussions         all the changes underway, the traditions of the trading
helped to give a sense of the industry outside of the   floor are now a thing of the past.
Vancouver centre.
                                                        Meeting of Regional Directors
For more information, please contact:
Warren Funt                                             On October 18th, 2000, IDA Regional Directors met
Pacific Regional Director                               at the Association’s Montréal offices. Senior Trade
(604) 331-4750 or wfunt@ida.ca                          Association Vice-President Peter Bailey chaired the
                                                        meeting attended by Fernande Lanoix, Morag
Prairie Region                                          MacGougan, Terry Melling, Warren Funt and Jim
                                                        Stevens.
The Alberta District Council held their Annual
Charity Golf Tournament during the month of June. Board of Directors Meets in Montréal
The tournament raised $4,000 which was donated
to Edmonton’s Festival of Trees, a fundraiser for the More than 70 enthusiastic guests were in attendance
University Hospital.                                  as the Honourable Leo Kolber, Senate of Canada,
                                                      addressed the Association’s Industry Dinner held on
The Manitoba District Council held their Annual October 18 th at the Intercontinental Hotel in
Charity Golf Tournament during the month of Montréal. Senator Kolber’s speech addressed issues
August. The tournament raised $2,000 which will related to the impact of future legislation on the
be donated to the Children’s Wish Foundation and Canadian financial services sector. Senator Kolber
the Children’s Hospital.                              is the Chair of the Senate Standing Committee on
                                                      Banking and Commerce.
In early October Joe Oliver, President and CEO;
Peter Bailey, Senior Vice-President, Trade On October 19th, Members of the Board of Directors
Association; Ian Russell, Senior Vice-President, and the National Advisory Committee held their
Capital Markets; and Terry Melling, Prairie Regional Quarterly Meetings.
Director, visited the province of Manitoba where they
met with the Manitoba District Council, the
Manitoba Securities Commission and the Minister
of Consumer and Corporate Affairs. In conjunction
with the trip to Manitoba and directly following,
Peter Bailey and Terry Melling visited with Member
firms with head offices in Winnipeg and Saskatoon.

For more information, please contact:
Terry Melling
Prairie Regional Director
(403) 260-6278 or tmelling@ida.ca

Quebec District                                            Hon. Leo Kolber, speaker at IDA Industry Dinner.


Stock Exchange Developments                             See you in Quebec!

The Montreal Exchange has undertaken its Quebec Members are looking forward to hosting the
demutualization process and, as of October 1, the next Annual Meeting and Conference of the IDA at
Exchange has become a for-profit company. With the Manoir Richelieu in Malbaie, Charlevoix County,

                                                                                                                  7
    just outside Québec City. Don’t forget to mark your calendars now—June 16-19.

    For more information, please contact:
    Fernande Lanoix,
    Quebec Regional Director
    (514) 878-2854 or flanoix@ida.ca

    Regulatory Update
    New rules now in effect:

    The Association recently announced Amendments to the Cash Account Rule set out in Form 1. These
    amendments will modify the requirements for cash accounts to:

    â Tighten and conform the credit practices followed by Member firms with respect to customer cash
      accounts;
    â Establish implicit margin rates that a Member firm must apply when determining the sufficiency of
      collateral within a customer cash account; and
    â Specifically require that security positions used as collateral for cash debit balances be included as an
      “amount loaned” exposure for the purposes of calculating the security concentration charge on Schedule
      9 of Form 1.

    IDA Bulletin #2750, which was issued on July 19, 2000, sets out the timetable for the phased-in
    implementation of these amendments as follows:

    â October 1, 2000 - Start of Testing: Members should have systems modifications complete in order to
      test the new rule.
    â October 1, 2000 to November 30, 2000 - Testing Period: Members should be testing systems required
      for the implementation of the new rule.
    â December 1, 2000 - Implementation Date: Effective implementation date of the new rule.
    â December 1, 2000 to January 31, 2001 - “Safe Harbour Period”: Members should be using the new
      rule. During this time, while Members should be using the new rule in their capital calculations, Members
      will not be charged with a capital deficiency or be deemed to be in Early Warning if such situation is
      due to the amendments to the rule.

    Member firms looking for additional details on these rule amendments may wish to consult previously
    issued IDA Compliance Interpretation Bulletin C-134.

    The Association recently announced the implementation of a new list, the List of Securities Eligible for
    Reduced Margin. This list replaces the List of Option Eligible Securities as the basis for determining
    which listed securities may be margined at rates of less than 50%. Bulletin #2732 and Member Regulation
    Notice MR-030 announced the implementation of this new list. To give Member firms a chance to adjust to
    these new requirements, the effective date of this new list was set at September 8, 2000 (10 business days
    from the date of publication of the List of Securities Eligible for Reduced Margin prepared using information
    as at June 30, 2000 - Member Regulation Notice MR-042).

    Association staff are now in the process of preparing the List of Securities Eligible for Reduced Margin
    using information as at September 30, 2000. This list will be published within the next few weeks through
    the issuance of a member regulation notice.
8
Upcoming rule changes:

Rules that will become effective in the coming months include:

·   Exemptions Requests and Exemption Hearings: Under proposed Policy No. 6, Part I Proficiency
    Requirements and Part II Course and Examination Exemptions, the District Councils have the power
    to grant discretionary exemptions. The proposed amendments will set out the procedure for those
    circumstances where applicants determine that they wish to seek an exemption from the applicable
    District Council.

·   Electronic Signatures: Considerable attention has been paid to the recently enacted Canadian Personal
    Information Protection and Electronic Documents Act, the U.S. Electronic Signatures Act and various
    other Electronic Signature legislation being enacted in other provinces. The IDA will be drafting rules
    that will be able to meet technological advances.

·   U.S. Withholding Tax Regulation Amendments: These IRS tax regulation amendments come into effect
    on January 1, 2001. To prepare for these amendments, the joint IDA/CBA U.S. Withholding Tax Working
    Group was formed in early 1998 with a mandate to develop a standard Canadian financial institution
    withholding tax agreement. The development of this agreement was seen as being critical if Member
    firms wished to continue to provide their customers the ability to invest in U.S. securities at reasonable
    withholding tax rates. The alternative, to provide significantly greater customer account documentation
    to the IRS, was not seen as a viable alternative.

    The working group has met on regular occasions over the past two years to develop a standard agreement,
    negotiate the terms of this agreement with the IRS and when the IRS announced their intention to have
    one global agreement, negotiate concessions to this global agreement on behalf of Canadian financial
    institutions. Negotiations are still ongoing with the IRS with respect to the “transitional relief” issue.
    Specifically, Member firms are still trying to negotiate to gain further “transitional relief” from the IRS
    with respect to the documentation maintained for their existing customer base either in the form of:

    â The acceptance of other forms of documentary evidence such as the use of SIN cards in combination
      with the T5 reporting regime; or
    â The receipt of additional time (as much as 2 years) to perform the necessary file repapering.

    Should these negotiations succeed, the working group feels that they would be in a position to recommend
    the use of this global withholding tax agreement. It should be noted however, that should a Member
    firm wish to enter into this agreement with the IRS (and become a “Qualified Intermediary” under the
    terms of the agreement), enhanced “know your client” procedures/documentation requirements will
    have to be adopted.

    In order to assist Member firms in learning about these regulation changes, a frequently asked questions
    page has been posted on the IDA web site. This page will be updated once negotiations are finalized.
    Further, a questionnaire was recently circulated to Member firms requesting that they report on their
    preparedness to adhere to these new regulations. The results of the questionnaire responses received to
    date indicate that a significant number of Member firms are unprepared for this rule change. Member
    firms should note that failure to prepare may result in a loss of U.S. securities business to other firms.



                                                                                                                  9
     ·   Referral Arrangements and Trade Names: As a result of the CSA Distribution Structures Position Paper,
         the IDA is currently developing rules to address under what circumstances referral fees and commission
         splitting may be permitted and when trade names may be employed by the Member and its salespersons.
         The rules are intended to ensure compliance with the CSA Paper and to clarify the IDA’s current
         position on these issues.

     ·   Policy No. 2 Minimum Standards for Retail Account Supervision: A subcommittee of the Joint Industry
         Compliance Group has been in the process of reviewing Policy No. 2 and revising various provisions
         contained therein. It is anticipated that the revised policy will be submitted to the next Board meeting
         for approval.

     ·   Day Trading: There has recently been a great deal of focus on the NASD’s proposed rule change on
         this issue. The IDA will be drafting a regulation creating certain proficiency requirements for those
         wanting to participate in day trading activities as well as to regulate day trading strategy providers.

     ·   A Policy on Reporting Requirements: This policy has been developed and approved by the Joint
         Industry Compliance Group. This policy requires applicable Members and their Partners, Directors,
         Officers, and RRs to report to the applicable Member firm and/or SRO items such as material changes
         in registration information, customer complaints, securities related claims pending or disposed, civil
         litigation claims, settlement agreements, the commencement of internal investigations, etc. The policy
         is currently under further development by IDA staff.

     ·   Capital requirements for Underwriting Commitments: Amendments that will modify Regulation 100.5
         and Schedule 2A of Form 1 that set out the capital requirements for underwritings. While there are
         several amendments, the ones of most consequence are the adoption of lower margin rates (for 25%
         and 50% margin rate securities) during the underwriting period, the establishment of a lower capital
         requirement (subject to certain conditions) where expressions of interest have been received from
         exempt list purchasers and the revision of the acceptable form of new issue letter for capital requirement
         reduction purposes.

     ·   Discretionary vs. Managed Accounts: The IDA is currently drafting amendments to Regulation 1300.3
         and 1300.5 to separate the characteristics of discretionary and managed accounts. The line between
         these two types of account structures has been blurred and as a result, discretionary accounts must be
         restricted and used only as a temporary measure, instead of the current practice of these accounts being
         consistently renewed annually.

     ·   Relief from Suitability: The Association, in conjunction with the Joint Industry Compliance Group’s
         Full-Service Brokers Suitability Sub-Committee, has been reviewing suitability requirements for its
         Members over the past year. The Canadian Securities Administrators issued a Press Release on April
         10, 2000 providing relief from suitability requirements for discount brokers and those Member firms
         that create separate business units. In response to the Press Release, the Association submitted a
         proposal to the CSA requesting further relief from suitability requirements for full-service Members.
         The IDA is currently awaiting comments from the CSA.

     ·   Corporate Accounts and Know-Your-Client Requirements: As a result of a recent case before the
         British Columbia Securities Commission, the Association was asked to review practices in the industry
         with respect to when Members firms should determine the beneficial owners of corporate accounts. A
         Corporate Veil Sub-Committee has been set up to review the issue and will be submitting a proposal to

10
    require Members to determine the beneficial owners of private and other unknown corporations whenever
    possible.

·   Equity Margin Rate Project: This project has now been underway for roughly nine months. The objective
    of this project is to replace the existing margin rate methodology used for equity securities, (which is
    based on market price per share), with a methodology that more accurately tracks market risk. In order
    to develop a replacement methodology, various methodologies have been reviewed with the requirements
    that:

    â The methodology selected would have to accurately track an individual security’s market risk by
      measuring both price risk and liquidity risk; and
    â The methodology selected would have to be reasonably simple to implement both from an operational
      and investor education standpoint.

    The methodology selected and referred to as the “basic margin rate” methodology is essentially a
    methodology for determining a customized margin rate for each equity security. At this point a review
    of the assumptions to be used in this new methodology along a study of the impact this approach would
    have on overall margin rates is underway.

·   Responsibilities of Compliance Officer and Ultimate Designated Person: These proposed rules will
    clearly set out the role and responsibilities of the Chief Compliance Officer as opposed to those of the
    Ultimate Designated Person who will be required to be a Chief Executive Officer, Chief Operating
    Officer, President or other similar position that has been granted decision-making authority.

·   Trade date/settlement date margining: The purpose of this proposal is to amend Note #5 in the General
    Notes and Definitions of Form 1 to allow Member firms to margin one block of accounts on one basis
    (either on a settlement date or trade date basis) and the other block of accounts on another basis provided
    that one of the two blocks is limited to acceptable institution, acceptable counterparty, regulated entity
    and investment counsellor accounts. The method chosen by the Member firm for an account will have
    to be used consistently from month to month. The objective of this proposal would be to allow a
    Member firm to margin its retail accounts on one basis (most likely trade date basis) and its institutional
    accounts on a different basis (most likely on a settlement date basis).

·   Capital and margin requirements for S&P/TSE 60 Index products: Amendments that will modify
    Regulations 100.2, 100.8, 100.9, 100.10 and 100.12 to include requirements for the S&P/TSE 60 Index
    products that are the same as the existing requirements for Toronto 35 Index products.

·   Cessation of the Quarterly Operations Questionnaire (QOQ) and Review of the Form 1 (Joint Regulatory
    Financial Questionnaire and Report) (JRFQ&R): Amendments that will modify the form and content
    of the information being reported through the JRFQ&R and the Monthly Financial Report (MFR) as
    well as result in the cessation of the QOQ. The objective is to identify opportunities for rationalizing
    the regulatory burden of reporting without compromising the regulator’s ability to monitor and review
    the operations of members.

For more information, please contact:
Keith Rose
Vice-President, Regulatory Policy
(416) 943-6907 or krose@ida.ca

                                                                                                                  11
     Enforcement: Disciplinary Decisions
     As a national self-regulatory organization of the Canadian Securities Industry, the IDA enforces rules and
     regulations regarding the sales, business and financial practices of its Member firms. Investigating
     complaints and disciplining Members are part of the IDA’s regulatory role.

     The IDA’s Enforcement Division may conduct an investigation of a Member firm or registered person as
     the result of an investor complaint, or where it is considered necessary or desirable to ensure compliance
     with IDA By-laws, Regulations or Policies.

     A Member firm or registered person can be summoned to a hearing and, if it is found that a violation has
     occurred, disciplinary penalties may be imposed. Whenever the IDA takes a disciplinary action against a
     Member firm or registered employee, notice of the penalty is published in the form of a Disciplinary
     Bulletin distributed to securities regulators and the media.


     HSBC James Capel Canada Inc.                           institution” as defined. Such practice had an adverse
     (now HSBC Securities (Canada) Inc.)                    effect on MRS’s risk-adjusted capital and indicated
     (No. 2748/00)                                          a flaw in its internal control systems.

     Violation: Due to technological difficulties and,      Penalty: $35,000 fine and $4,150 towards costs of
     consequently, reconciliation problems arising from     the investigation.
     the acquisition of Moss Lawson & Co. and Gordon
     Capital Corp., HSBC reported risk-adjusted capital     Marc Guillemette
     (“RAC”) deficiencies for the periods December 1998     (No. 2749/00)
     and January 1999. An injection of capital by HSBC
     in February 1999 rectified the firm’s RAC              Violation: Misappropriated five share certificates
     deficiencies. The Joint Regulatory and Financial       from a client and conducted personal financial
     Questionnaire and Report for the period ending         dealings with a client without knowledge of his
     December 1998 indicated that HSBC did not              Member firm.
     maintain adequate books and records as prescribed
     because such books and records did not accurately      Penalty: $110,000 fine and permanent prohibition
     reflect the status of certain accounts for internal    from employment in any capacity by a Member firm.
     reconciliation purposes.
                                                            Frederick Monte Ponech
     Penalty: $60,000 fine and $10,710 towards costs of     (No. 2751/00)
     the investigation.
                                                          Violation: Effected trades in a client account upon
     MRS Securities Services Inc.                         instructions from a third party when there was no
     (No. 2752/00)                                        written Trading Authorization permitting such
                                                          trading activities. Failed to use due diligence to learn
     Violation: From October 1997 to mid-1999, MRS essential facts about his client and to ensure that his
     Securities Inc. (“MRS”) deposited its business recommendations and every order accepted were
     receipts and client cash into the bank account of a appropriate and in keeping with client’s investment
     related Loan and Trust Company before it transferred objectives and risk tolerance.
     the funds into its own bank account, usually within
     a day. The related company was not an “acceptable

12
Penalty: $6,500 fine; six month supervision upon misrepresented account balances in a series of letters
return to the industry; rewrite CPH exam and $4,000 and fictitious account statements sent to the client.
towards costs of the investigation.
                                                    Penalty: $10,000 fine; six months suspension;
Taurus Capital Markets Limited                      rewrite CPH; twelve months strict supervision and
(No. 2757/00)                                       $4,000 towards costs of the investigation.

Violation: Failed to maintain adequate internal         Ian Scott - Moncrieff
controls to ensure proper repatriation of back-office   (2764/00)
operations.
                                                        Violation: Exercised improper discretionary trading
Penalty: $30,000 fine and $1,500 towards costs of       activities in two client accounts and failed to ensure
the investigation.                                      that a New Client Application Form reflected
                                                        essential facts about the client’s investment
Stephen Parke                                           objectives and risk tolerance.
(No. 2758/00)
                                                        Penalty: $15,000 fine; rewrite CPH and $6,500
Violation: Exercised improper discretionary trading     towards costs of the investigation.
activities in a client account.
                                                        James Donald Wooster
Penalty: $10,000 fine, rewrite CPH exam and $900        (2766/00)
towards costs of the investigation.
                                                        Violation: Failed to use due diligence to learn
Peter Przygoda                                          essential facts relative to a client and to ensure that
(No. 2747/00)                                           recommendations were suitable and in keeping with
                                                        the client’s investment objectives and risk tolerance.
Violation: Failed to use due diligence to learn
essential facts about his client and to ensure that Penalty: $12,500 fine; rewrite CPH and $2,000
recommendations were suitable and in keeping with towards costs of the investigation.
client’s investment objectives and risk tolerance.
                                                        Gary Stewart Brookes
Penalty: $5,000 fine; disgorgement of commissions       (2767/00)
in the amount of $2,500; rewrite CPH exam; six
months strict supervision and $2,500 towards costs      Violation: Failed, in his capacity as a Branch
of the investigation.                                   Manger, to ensure that an updated New Client
                                                        Application Form reflected the true objectives and
Warren Babb                                             risk tolerance of a retired client, thereby prevented
(No. 2761/00)                                           member firm from learning essential facts relative
                                                        to the client.
Violation: Failed to follow client’s instructions to
sell certain holdings in his account, causing losses    Penalty: Formal reprimand and $500 towards costs
to the client; failed to advise Member of a client      of the investigation.
complaint and failed to advise subsequent Member
employer of current client dispute. Without the         Note: In accepting the negotiated penalty noted
knowledge of either member employer, Babb               above, the Pacific District Council stressed that had
promised to compensate client for his losses and        the violation occurred in the present day, instead of


                                                                                                                  13
     1995 (when there were no established Guidelines in or advised on the security on behalf of the client
     and Penalties), it would expect that the negotiated without complying with his Member firm’s internal
     penalty would be considerably higher.                   policies governing private securities transactions and
                                                             without complying with relevant industry standards.
     Robert William Stevenson Beaty                          Traded in the security without recording the
     (2774/00)                                               transaction on the books of his Member firm and
                                                             without sending his client confirmation in respect
     Violation: Failed to use due diligence to ensure that of or monthly statements disclosing the transaction.
     recommendations were appropriate and in keeping
     with client’s investment objectives and risk tolerance. Penalty: $19,000 fine; rewrite CPH and $3,000
     Traded in a security on behalf of a client and directly towards costs of the investigation.
     and indirectly participated in the distribution of the
     security without a receipt for a prospectus having For more information, please contact:
     been obtained as required under section 42 (now Fred Maefs
     section 61) of the Securities Act. Failed to ensure Vice-President, Enforcement
     that the trade in or distribution of the security was (416) 943-6904 or fmaefs@ida.ca
     exempt from the requirement of section 42. Traded




                                The IDA Welcomes New Members

                 Company                                                            Date



                 KingsGate Securities Limited                                       July 17, 2000

                 Solium Capital Online Inc.                                         July 17, 2000

                 ITG Canada Corp.                                                   August 2, 2000

                 Sheridan Securities Inc.                                           August 14, 2000

                 Leyland, McLachlan Advisory Group Incorporated                    September 19, 2000

                 Peak Securities Inc.                                               September 29, 2000

                 Canada Invest Direct Inc.                                          October 20, 2000




14
15
                                                                                                                      INVESTMENT
                                                                                                                      D E A L E R S
                                                                                                                      ASSOCIATION
                                                                                                                      OF CANADA

                                                                                                                        www.ida.ca




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                                                                                                                      Vancouver, BC
Ce rapport est aussi disponible en français sur demande.                                                              V6B 4N9
The Investment Dealers Association of Canada is the national self-regulatory organization (SRO) and trade             Tel.: (604) 683-6222
association of the securities industry. The Association’s role is to foster fair, efficient and competitive capital   Fax: (604) 683-3491
markets by encouraging participation in the savings and investment process and by ensuring the integrity of
the marketplace.
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