Securities Law & Instruments

[Update: The terms and conditions imposed by the Director in this decision were removed as of April 3, 2012.]


IN THE MATTER OF THE REGISTRATION OF
ALFREDO PINO
STAFF'S RECOMMENDATION REGARDING
IMPOSITION OF TERMS AND CONDITIONS ON REGISTRATION
Subsection 27(3) of the Securities Act, R.S.O. 1990, c. S.5



Date of decision:
March 22, 2011
 
Director:
George Gunn
Manager, Registrant Conduct and Risk Analysis
Ontario Securities Commission
 
Written submissions by:
Mark Skuce, Legal Counsel
Ontario Securities Commission

On March 8, 2011, staff of the Ontario Securities Commission (Staff) informed Alfredo Pino (Pino), an individual registered as a dealing representative in the category of mutual fund dealer with Investors Group Financial Services Inc. (Investors Group), that it had recommended to the Director that terms and conditions be applied to his registration. In support of its recommendation, Staff alleged the following:

1. Pino assumed carriage of accounts for clients EL and CC from Investors Group representative DP following DP's departure from the firm. In August 2009, Pino acted on the instructions of an individual posing as CC to improperly redeem approximately $56,000 from CC's account. At the instructions of this imposter, these funds were sent to the account of one "BVC". These redemptions were never authorized by the real CC.

2. Between October 2009 and February 2010, Pino acted on the instructions of an individual posing as EL to improperly redeem approximately $126,000 from EL's account. At the instructions of this imposter, these funds were sent to the account of one "JT". These redemptions were never authorized by the real EL.

3. With respect to the redemptions in both the CC and EL accounts, Pino acted on instructions received by email and by facsimile only, without taking appropriate steps to ascertain the identity of the individuals providing the instructions. In so doing, Pino failed to meet the client identification requirements imposed upon him by the following:

• the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and the regulations thereunder;

• OSC Rule 31-505 Conditions of Registration; and

• National Instrument 31-103 Registration Requirements and Exemptions.

For these reasons, Staff believed Pino lacked the necessary proficiency of a securities professional. To address this fundamental concern, Staff proposed the terms and conditions in Schedule A in order to ensure that Pino will be subject to adequate supervision and improve his knowledge of applicable securities legislation. Pino did not request and opportunity to be heard in relation to Staff's recommendation, and agreed to the proposed terms and conditions on March 22, 2011.

 

SCHEDULE A

Conditions for the Registration of

Alfredo Pino

The registration of Alfredo Pino (the Registrant) as a dealing representative in the category of mutual fund dealer is subject to the specific terms and conditions set out below. These terms and conditions were imposed by the Director pursuant to subsection 27(3) of the Securities Act (Ontario) (the Act).

If the registrant fails to comply with these terms and conditions, the Director may suspend the Registrant's registration.

Terms and Conditions

Supervision

The registration of the Registrant shall be subject to strict supervision by his sponsoring firm for a period of 1 year from the date hereof.

Written monthly supervision reports (in specified form) are to be submitted to the Ontario Securities Commission (the OSC), Attention: Manager, Registrant Conduct and Risk Analysis Team, Compliance and Registrant Regulation Branch, and also to the Mutual Fund Dealers Association (MFDA), Attention: Manager, Compliance, reporting details of the Registrant's sales activities and dealings with clients. Monthly supervision reports shall be submitted within 15 calendar days after the end of each month.

Education

The Registrant is required to successfully complete, and provide proof thereof, the Investment Funds Course (IFC) offered by CSI Global Education Inc. The IFC must be completed no later than October 1, 2011.

If the Registrant fails to comply with any of these terms and conditions, the Director may suspend the Registrant's registration. After completion of these terms and conditions, the Director will review the Registrant's suitability for registration and may determine to, among other things, extend these terms and conditions, impose new terms and conditions or suspend the Registrant's registration. At that time, the Registrant would be provided with an opportunity to be heard pursuant to subsection 31 of the Act.

Notifying OSC

The Registrant must immediately report to the OSC's Manager, Registrant Conduct and Risk Analysis Team, Compliance and Registrant Regulation Branch if he is under investigation by the MFDA or is reprimanded in any way by the MFDA.

 

STRICT SUPERVISION REPORT

To be filed with Manager, Registrant Conduct and Risk Analysis Team,

Compliance and Registrant Regulation Branch -- Ontario Securities Commission

I hereby certify that supervision has been conducted for the month ending __________, 201___ of the trading activities of Alfredo Pino by the undersigned. I further certify the following:

1. All orders, both buy and sell, and sales contracts have been reviewed by a supervising officer of Investors Group Financial Services Inc. prior to the trade occurring.

2. All client accounts have been reviewed for leveraging, suitability of investments, overconcentration of investments, excess trading or switching, and any amendments to know your client information.

3. A review of trading activity on a daily basis has been conducted of the dealing representative's client accounts.

4. No transactions have been made in any client account until the full and correct documentation is in place.

5. The Registrant has not been granted any power of attorney over any client accounts.

6. All payments for the purchase of the investments were made payable to the dealer. There were no cash payments accepted.

7. No client complaints have been received during the preceding month. If there have been complaints, an outline of the nature of the complaint and follow-up action initiated by the company is attached.{•}

8. There has been no handling of clients' funds or securities or issuance of cheques to clients without management approval.

9. Any transfer of funds or securities between clients' accounts has been authorized in writing and reviewed by the supervising officer.

10. Spot audits relative to the dealing representative's client accounts have been conducted during the preceding month to ensure compliance with these procedures and no violations of these procedures were discovered.

{•} In the event of client complaints or violations of securities legislation and/or the dealer's internal policies and procedures, the OSC must be notified immediately.