Regulatory panel finds violations in outside business activities and undisclosed investments, imposing sanctions
A Canadian Investment Regulatory Organization (CIRO) hearing panel, operating under the Mutual Fund Dealer Rules, has released its reasons for sanctioning Andrew Kazina.
The panel imposed a permanent prohibition on Kazina's authority to conduct securities-related business while employed by or associated with any CIRO Dealer Member registered as a mutual fund dealer.
Additionally, Kazina was fined $313,500 and ordered to pay $30,000 in costs.
The violations took place while Kazina operated in the Winnipeg, Manitoba area. CIRO records confirm that Kazina is not currently registered in the securities industry in any capacity.
According to the Misconduct Decision, the panel found that Kazina engaged in undisclosed outside business activities from February 8, 2002, to October 5, 2017.
The panel determined that Kazina operated businesses offering tax and financial planning services, as well as marketing, franchising, and consulting services, without obtaining Member approval.
The panel ruled that this was contrary to the Mutual Fund Dealer Rules and the Member’s policies and procedures.
Between January 2012 and October 5, 2017, Kazina also recommended and accepted approximately $257,500 for investment in a business he operated, involving at least eight clients and two non-clients.
The panel found that this constituted securities-related business that was not conducted through the Member’s facilities, in violation of regulatory requirements.
Further, the panel determined that Kazina solicited approximately $232,500 from at least eight clients to fund and operate his business.
The funds were co-mingled with his personal savings in accounts held in his name or jointly with his wife.
CIRO concluded that this resulted in a conflict of interest, which Kazina did not disclose to the Member or resolve in the clients' best interests.
Additionally, between 2006 and 2017, Kazina provided false or misleading information on annual compliance questionnaires submitted to the Member. The panel found that he misrepresented his outside business activities, preventing the Member from identifying potential regulatory concerns.
In determining the penalty, the panel considered the seriousness of the misconduct, the need for investor protection, and the requirement to uphold market integrity.
The panel also factored in Kazina’s experience in the industry and his role as a branch manager, which carried additional supervisory responsibilities.
The decision on sanction, dated January 15, follows a liability decision issued on November 15, 2023.
