Rep believed husband did not pay fair share of household expenses
A former dealing representative of Quadrus Investment Services Ltd. in the Onoway area of Alberta has been given a permanent ban and a $15,000 fine by the Canadian Investment Regulatory Organization (CIRO).
A CIRO hearing panel made its decision after considering the conduct of Susan Armitstead who admitted misappropriation of client funds between 2016 and 2018, involving her own spouse. She made 10 redemptions totalling more than $61,000 from his registered and unregistered accounts, without his knowledge or authorization, signing his signature on forms and directing funds to her own account.
Although Armistead was not at the disciplinary hearing in April, it was noted that one of the reasons given for misappropriating the funds was that “her husband was not paying his fair share of household expenses.”
The panel had suggested a penalty of $20,000-$30,000 due to the seriousness of the misconduct, which was exacerbated by her recording false or misleading notes in the Quadrus’ back office system and making false or misleading statements to the Dealer Member during supervisory inquiries.
However, it was also noted that Armistead had pleaded guilty to fraud in criminal proceedings and was handed a 12 month conditional sentence, served in the community. A civil judgment was also made against her relating to action by the Dealer Member’s insurer which had compensated the client. Armistead did not defend the action and paid off a judgment of $91,542.68, including legal costs and prejudgment interest.
Her spouse had also begun divorce proceedings, she had lost her certification as a financial planner, lost her licence with the Insurance Council of Alberta, and is dealing with a disciplinary proceeding with FP Canada.
In additional to the fine and a permanent prohibition on her authority to conduct securities related business while in the employ of or associated with any Dealer Member of CIRO, Armistead was also ordered to pay $5,000 in costs.
