Canada’s investment industry regulator, the Canadian Investment Regulatory Organization (CIRO), has imposed severe sanctions on B.C. mutual fund dealer Lorne Stuart Allison after he diverted millions of dollars from retirees’ accounts to make unauthorized investments. In addition to a lifetime ban from conducting securities-related business, Allison has been fined $50,000 and ordered to disgorge $19,846 in fees he collected from senior clients.
Table of Contents
Misleading Retiree Clients
Allison, who was registered with Royal Mutual Funds Inc. in B.C. and worked on Vancouver Island, engaged in misconduct during 2020 and 2021. He recommended that retiree clients, including “JE, KE, and LC,” open online brokerage accounts with institutions outside of Royal Mutual Funds Inc. This allowed him to execute trades in non-mutual fund securities, charging the clients for his services.
Significant Financial Risks and Losses
In total, Allison invested $2.75 million on behalf of these clients. Fortunately, JE and KE did not experience any financial loss, but LC incurred a loss of $7,623 due to Allison’s unauthorized trades.
Continued Misconduct After Resignation
Despite resigning from Royal Mutual Funds in February 2021, Allison continued to execute unsanctioned trades for other clients, transferring over $3.7 million from five client accounts. This behavior placed client assets at significant risk, as he failed to disclose potential conflicts of interest.
TFSA vs. RRSP: Which is the Better Investment for Your Money?
Grow Your Wealth: Top 3 Best Passive Income Investments for Canadians
Why Your Group RRSP is a Valuable Benefit: What to Do When You Leave the Program
Grow Your Wealth: Top 3 Best Passive Income Investments for Canadians
Serious Misconduct and Regulatory Action
The CIRO panel stated that by charging fees for executing trades and accepting payments without proper disclosure, Allison committed serious misconduct, violating industry rules and endangering client funds.
Leave a Reply