Coquitlam-based former Union Securities broker Henry Sojka has been fined $120,000 for myriad infractions, the Investment Industry Regulatory Organization of Canada (IIROC) announced October 28.
IIROC found that Sojka failed to use due diligence, he discretionarily traded in an account without authorization and failed to attend and give IIROC information regarding his conduct.
The regulator fined him $50,000 for unsuitable and unauthorized and discretionary trading and another $50,000 for failing to cooperate. He must also pay $20,000 in costs.
The situation involved Sojka’s niece, who was named at the hearing by the initials S.F., who was 19 years old in 2006, when she started allowing her uncle to manage her money.
She was a student who had no income but $200,000 in assets from her mother’s estate.
Between July 12, 2006 and May 22, 2009, a total of $678,097 was deposited into the account.
SF’s intention was to use the funds to pay for her brother’s education, purchase a home and assist her step brother, according to IIROC.
She had signed an investment objectives form that said that her goal was 70% income, 20% long-term growth, 5% medium risk securities and 5% venture-speculative securities, IIROC noted.
S.F. testified that she did not want to change her investment objectives or risk tolerance but her uncle asked her to sign some new forms that were blank, according to IIROC.
Her investment objectives were changed on March 1, 2009 to 100% venture-speculative and a risk tolerance that was 100% high risk, IIROC noted.
Approximately 42 times between March 2009 and May 2011, Sojka bought and sold, within a relatively short time, shares of resource companies, according to IIROC.
Many of those investments were high risk.
The "impugned transactions" incurred a $6,984 loss in addition to $34,554 in commission charges for a total loss of $41,538, IIROC said, adding that the investments “were unsuitable for S.F. given her financial situation, investment knowledge, investment objectives and risk tolerance.”
Between March 2009 and May 2011, Sojka traded shares of approximately 94 different companies. He used his discretion with respect to the type of security, quantity, price and timing of the trades.
He also earned commissions for 93 transactions, IIROC said.
S.F. testified that she did not give her uncle written authorization for discretionary trading and the account was never designated and approved as a discretionary account by Union Securities, IIROC said.
IIROC then made many efforts to make contact with Sojka – by registered mail and by phone – but Sojka did not attend his September 2014 investigatory interview.
He was personally served at his residence on December 4, 2015, but there was no response to the letter and he did not attend his January 6, 2016 investigatory interview, IIROC said.
In addition to the fines, IIROC has issued what it calls a “permanent bar” on Sojka for any activities that IIROC oversees. Sojka left Union Securities in October 2012 and has not been an IIROC-approved person since.
