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George Georgiou - Settlement Agreement

http://www.investorvoice.ca/Cases/Investor/Blackburn/Georgiou(Re).htm

Ontario Securities Commission

Chapter 13 - SRO Notices and Disciplinary Proceedings 13.1 SRO Notices and Disciplinary Decisions (2000), 23 OSCB 3772 #21/00
May 19, 2000

Georgiou (Re)

IN THE MATTER OF Discipline Action Pursuant to By-Law 20 of
the Investment Dealers Association of Canada

May 17, 2000

George Georgiou - Settlement Agreement

Pursuant to By-law 20.25 of the Investment Dealers Association of Canada ("the Association") the Respondent, George Georgiou, agrees and consents to the following:

I. SUMMARY OF FACTS

1.
George Georgiou (the "Respondent") has been a Registered Representative in the securities industry with a Member of the Association from January 6, 1989 to January 27, 1995. His work history is as follows:

Walwyn Stogell Cochran Murray Ltd. (Kitchener, Ont.)
Jan 6'89 to Jun 1'90
Midland Walwyn Capital Inc.* (Kitchener, Ont.) Jun
1'90 to Nov 19 '93
Levesque Securities Inc. (Kitchener, Ont.) Nov 24
'93 to Jan 27 '95

(*"Midland", now Merrill Lynch Canada Inc.)
[...]

87. In settling this matter, the Association took into consideration the fact that these events took place over four years ago while the Respondent was between the ages of 21 to 25.

II.
STATUTES OR REGULATIONS THERETO, BY-LAWS, REGULATIONS, RULINGS OR POLICIES NOT COMPLIED WITH:


The Respondent failed to comply with the By-laws, Regulations or Policies of the Association as follows:

Count #1 to #3
Between January 22, 1993 to November 19, 1993, George Georgiou effected discretionary trades in 3 client accounts, namely the accounts of Hildegard Benik, Isabel Hetherington and Gail Blackburn, without the prior knowledge or written authorization of the clients and without such client accounts having been specifically approved and accepted in writing as a discretionary account by the designated person of the Member, Midland Walwyn Capital Inc., contrary to Regulation 1300.4(a) and (b).

Count #4 to #6
Between January 22, 1993 to November 19, 1993, George Georgiou effected short sales transactions in 3 client accounts, namely the accounts of Hildegard Benik, Isabel Hetherington and Christine Lynda Brokenshire, without first obtaining signed margin agreements from the clients, contrary to Regulation 200.1(i)(2).

Count #7
Between November 24, 1993 to January 27, 1995, George Georgiou effected short sales in 6 client accounts while under restrictions from the Member, Midland Walwyn Capital Inc., which prohibited him from conducting short sales without obtaining prior manager approval, thereby engaging in business conduct which is unbecoming or detrimental to the public interest, contrary to By-law 29.1.

Count #8 to #11
Between January 22, 1993 to November 19, 1993, in respect of 4 client accounts, namely the accounts of Hildegard Bepik, Christine Lynda Brokenshire, Kimberly Nordick and John and Freda Szalay, George Georgiou failed to exercise due diligence to ensure that trade recommendations made for those accounts were appropriate for the clients and in keeping with the clients' respective investment objectives, contrary to Regulation 1300.1(c).

Count #12 to #15
Between January 22, 1993 to January 27, 1995, George Georgiou either borrowed monies from or loaned monies to 4 clients, namely Peter and Barbara Wurtele, Gale Blackburn, John Matsias and Jack Hougassien (Tech-Hi), thereby engaging in business conduct which is unbecoming or detrimental to the public interest, contrary to By-law 29.1.

Count #16 to #17
On or about July 16, 1993, George Georgiou failed update the new account documentation with respect to 2 client accounts, namely the accounts of Hildegard Benik and William Nordick, thereby failing to exercise due diligence to learn the essential facts relative to every client and to every order or account accepted, contrary to Regulation 1300.1(a).

Count #18 to #20
Between November 24, 1993 to January 27, 1995, in respect of 3 client accounts, namely the accounts of Gale Blackburn, Paul and Anna Tuerr and Accumach Holdings, George Georgiou either provided the clients with written guarantees or entered into personal financial arrangements to privately settle the clients' complaints without the knowledge, consent or authorization of the Member firm, Levesque Securities Inc., thereby engaging in business conduct which is unbecoming or detrimental to the public interest, contrary to By-law 29.1.

Count #21
Between November 1, 1994 to January 27, 1995, George Georgiou effected discretionary trades in 1 client account, namely the account of Gail Blackburn, without the prior written authorization of the client and without the client account having been specifically approved and accepted in writing as a discretionary account by the designated person of the Member. Levesque Securities Inc., contrary to Regulation 1300.4(a) and (b).

Count #22
Between November 1, 1994 to January 27, 1995, George Georgiou effected 47 transactions in 1 client account, namely the account of Tech-Hi, thereby generating $43,122.83 in commissions. The trading activity in the account was excessive and beyond the bounds of good business practice, contrary to Regulation 1300.1(b).

Count #23
Between November 1, 1994 to January 27, 1995, George Georgiou effected 76 transactions in 1 client account, namely the account of Paul and Anna Tuerr, thereby generating $46,240.30 in commissions. The trading activity in the account was excessive and beyond the bounds of good business practice, contrary to Regulation 1300.11(b).

III. FUTURE COMPLIANCE

The Respondent hereby states that in future he will comply with the Regulations not complied with as described in Part II of this Settlement Agreement.

IV. CONSENT AND AGREEMENT

The Respondent hereby consents and agrees with the terms of settlement as set out in this Settlement Agreement.

V. ACCEPTANCE OF PENALTY

The Respondent accepts the imposition by the Association of the following discipline penalties: i)
A fine of $50,000 to be paid to the Association within four (4) months of the date of acceptance of this Settlement Agreement by the District Council;
ii)
A suspension of the Respondent's receiving approval from acting in any registered capacity with any Member of the Association for a period of ten (10) years, commencing January 31, 1995 till January 31, 2005;
iii)
A condition of strict supervision for a period of three (3) years following any period of suspension imposed by the District Council, and the employing Member shall be required to complete and submit monthly supervision reports on a timely basis to the Registration Department of the Association;
iv)
A condition that the Respondent must re-write and pass the Conduct and Practices Handbook examination administered by the Canadian Securities Institute within ninety (90) days prior to the submission of an application for approval by the Respondent to the Association. Evidence of successful completion must be provided to the Association within thirty (30) days thereafter; and
v)
The Respondent must satisfy in full all of the fines, conditions and costs imposed by the District Council pursuant to this Settlement Agreement within the specified time parameters. Failure to do so may result in the immediate suspension of his approval in any capacity until such time that all fines, conditions and costs are paid or complied within full.


VI. ASSOCIATION COSTS

The Respondent shall pay the Association for its costs of the investigation in this matter the amount of $15,000.00 payable within four (4) months of the acceptance of this Settlement Agreement by the District Council.

VII. EFFECT OF NON-COMPLIANCE WITH PENALTIES

The Respondent admits notice of By-law 20.35 of the Association: 20.35
In the event that a fine or condition imposed by the District Council pursuant to By-law 20.6 or 20.10 is not paid or complied with, respectively, within the time prescribed by the District Council, the applicable District Council may, upon application by the Senior Vice-President, Member Regulation, and without further notice to the individual or Member concerned, suspend the approval of such individual or the rights and privileges of such Member, respectively, until such fine is paid or condition fulfilled.


VIII. WAIVER

The Respondent hereby waives his right to a hearing pursuant to the Association's By-laws in respect of the matters described herein and any right of appeal or review which may be available pursuant to such By-laws or any applicable legislation.

IX. EFFECTIVE DATE AND NOTICE OF PENALTY

This Settlement Agreement shall only become effective in accordance with its terms upon the acceptance or the imposition of a lessor penalty or less onerous terms by the applicable District Council of the Association in accordance with By-law 20.26 of the Association and, in such event, the Respondent shall be deemed to have been penalized pursuant to By-law 20.10 for the purpose of giving notice thereof.

DATED at the City of Toronto in the Province of Ontario, this 17th day of May, 2000. WITNESS GEORGE GEORGIOU


ACCEPTED by the Ontario District Council of the Investment Dealers Association of Canada, this 18th day of May, 2000.
INVESTMENT DEALERS ASSOCIATION OF CANADA
Per: Fred Kaufman
Per: Bob Guilday
Per: David Kerr

http://www.investorvoice.ca/Cases/Investor/Blackburn/Georgiou(Re).htm