IN THE MATTER OF THE
INVESTMENT DEALERS ASSOCIATION OF CANADA
DECISION OF ALBERTA DISTRICT COUNCIL AS TO PENALTY
Hearing: July 9, 2007
Oral Decision Rendered: July 9, 2007
District Council Members: Gail L. Harding Q.C., Chair
Counsel for the IDA: Charlene L. McLaughlin
Counsel for the Respondent: James Rooney Q.C.
J. Barrie Marshall
1. By a decision dated February 15, 2007, this Council found the Respondent, Vance Elder,
guilty of the following contraventions:
The Respondent, directed, authorized or was willfully and/or recklessly blind to conduct
engaged in by his Administrative Assistant, C.B., of forgery of client signatures to client
account documentation, including the clients B.O., W.O., H.O., all clients of the
Respondent, during the period November 1996 to June 2001, while a Registered
Representative of the Member, BMO Nesbitt Burns, which conduct is unbecoming a
registrant and detrimental to the public interest, contrary to Association By-law 29.1.
The Respondent, directed, authorized or was wilfully and/or recklessly blind to conduct
engaged in by his Administrative Assistant, C.B., of forgery of the Respondent’s
signature to client account documentation, all clients of the Respondent, during the period
November 1996 to June 2001, while a Registered Representative of the Member, BMO
Nesbitt Burns, which conduct is unbecoming a registrant and detrimental to the public
interest, contrary to Association By-law 29.1.
The Respondent, while a Registered Representative with BMO Nesbitt Burns, directed,
authorized or was wilfully and/or recklessly blind to conduct of his Administrative
Assistant, C.B., during the period November 1996 to June 2001, when C.B. was not
registered or registered as an Investment Representative only, of providing investment
advice and recommendations to the Respondent’s clients, which conduct is unbecoming a
registrant and detrimental to the public interest, contrary to Association Regulation
1300.1(a) and Association By-law 29.1.
2. In determining the appropriate penalty, the Panel considered the framework set out in the
IDA General Principles for assessing the gravity of a particular breach of the
Association’s By-Laws. Such principles state: “Sanctions should be based on the
circumstances of the particular misconduct by a respondent with an aim at general
deterrence. General deterrence will follow from an appropriate decision and deter others
from engaging in similar misconduct and improve overall business standards in the
securities industry.” In addition the Panel was advised that “. . . the responsibility of the
District Council in a penalty hearing is to determine a penalty appropriate to the conduct
and respondent before it, reflecting that its primary purpose is prevention rather than
punishment.” Deterrence and prevention, not punishment, is therefore the overriding
objectives of the sanctions. As such the Panel should make its decision on with a focus
on remedial rather than punitive objectives.
3. In reviewing the key considerations it was agreed by all parties that no client had
complained or suffered harm as a result of the by-law contraventions. The Respondent
also produced a letter from the Chief Compliance Officer (Retail) for BMO Nesbitt Burns
which advised that the firm’s database indicated no written client complaints against
Elder which have generated any client settlements. The IDA confirmed that the
Respondent has had no prior disciplinary record. There was also no economic loss to the
Respondent’s clients or the member firm arising out of the Respondent’s misconduct.
4. The Respondent provided the Panel with an affidavit setting out the emotional and
financial impact of this matter on him. In particular, the Respondent states that he has
personally incurred legal costs in the approximate sum of $350,000. He also provided
evidence to support that the loss of his Senior Vice President designation would impact
his future earnings.
5. The Panel noted that the underlying violation in contraventions 1 and 2 relates to the
forging of client’s signatures and the Respondent’s signature and that the act of forgery is
a very serious offence which attracts the most serious of sanctions. The Respondent’s
assistant has already been permanently prohibited from being registered in any capacity
with the IDA. In addition, the conduct continued over a long period of time and occurred
on multiple occasions. Although not considered an aggregating factor, it was also noted
that the Respondent did not provide full cooperation to the IDA during the investigation.
6. No precedents were provided to the Panel in which a registered representative was held
liable for the actions of a non-registered or registered member of the registered
representative’s team. However, there are precedents relating to failure to supervise
involving Branch Managers and others in designated supervisory positions. These cases
were of assistance to the Council in that the principle of lack of supervision is the same.
7. Counsel for the IDA and Counsel for the Respondent presented to the Panel a joint
recommendation on sanctions which, upon consideration of the above factors, the Panel
is prepared to accept. Accordingly, the Panel imposes the following penalties:
(a) A fine in the amount of $100,000;
(b) A period of twelve (12) months close supervision;
(c) Revocation of the Respondent’s Senior Vice President designation with no
reinstatement of such title for a two year period;
(d) A rewrite and pass of the examination based on the Conduct and Practices
Handbook for securities industry professionals within six months of the date of
(e) The accumulation of an additional twenty-five (25) continuing education credits
over a two year period;
(f) Costs of the Association in the amount of $15,000.
Gail L. Harding, Q. C., Chair