A father-son team have been sanctioned for selling exempt securities to unqualified clients and for allowing an unlicensed assistant to place orders… after the unlicensed assistant reported the infractions.
The Investment Industry Regulatory Organization of Canada (IIROC) has imposed financial and disciplinary sanctions on a father-son team who sold exempt securities to unqualified clients and allowed an unlicensed assistant to place orders... charges that came to light after the assistant reported the infractions.
IIROC said Ivan Jacobsen and his son Keith Jacobsen admitted that they sold prospectus exempt securities to clients who were not qualified to purchase them while they were at the Canaccord Whitehorse, Yukon, office. Ivan also admitted that he allowed an unlicensed assistant to place orders in his absence.
The assistant, referred to only as “RM,” in May 2011 contacted Canaccord head office telling them of the unregistered activity and also provided information regarding the sale of the private placements. In response the allegations, Ivan resigned and the Whitehorse office of Canaccord was closed.
Between July 2010 and January 2011, the pair failed to use due diligence to ensure that clients qualified as “accredited investors” before facilitating their purchase of exempt securities, IIROC said.
According to the case file, between September 2007 and June 2008, Ivan allowed his assistant to accept trading instructions and place orders for clients before the assistant was properly licensed to do so.
The pair allowed unqualified clients to participate in eight different private placements. At least 21 unqualified clients made 31 purchases totaling $167,758. The lowest single transaction was $2,000 and the highest was $42,000. The next highest transaction was $14,000 and the average was $5,400.
Neither individual is currently registered with an IIROC-regulated firm.
The settlement includes a $25,000 fine for Ivan and a $15,000 fine for Keith. They must also each repay $2,096 that was earned in commission and $2,500 each in costs. Ivan and Keith worked together in a partnership at Canaccord’s Whitehorse office and shared all of the commissions which were generated from transactions.
Ivan has been permanently banned from acting in any supervisory capacity for a dealer member firm. Both Ivan and Keith must complete the conduct and practices handbook course before re-registering in any capacity with an IIROC member firm.
Neither Ivan nor Keith is currently registered with a dealer member firm. Ivan is 67 years old, retired. IIROC said it acknowledges that Ivan does not intend to seek registration in any capacity, or return to the industry.
