Investment adviser fined for inappropriate recommendations

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After a number of successes in the years that followed, including a lucrative investment in a TSX-listed coal company recommended by Peters, the husband asked if he could recommend TSX Venture Exchange-listed coal companies. Peters recommended Colonial Coal, a junior exploration company that was classified as a high risk investment.

As of January 31, 2011, approximately 448,900 shares of Colonial Coal had been purchased and held in the woman’s accounts, representing approximately 47% of all holdings in those accounts. In February, Peters updated the woman’s investment goals to 100% speculative (high risk) and stated on the account update form that she was “able to increase risk.”

Shortly afterwards, in April, Peters’ husband emailed his wife that his wife was being fired from her job as a pharmacist and that her employer would continue to pay her for 18 months if she couldn’t find another job, and that she would then Half of what she would have received. During this time, the couple were in the process of borrowing money from a bank to buy more shares in Colonial Coal.

Peters recommended and continued to buy Colonial Coal shares in the woman’s accounts. As of June 30, 2012, the wife’s account contained 580,950 shares in the company, the value of which had fallen by around 54%. The following month, the woman opened a locked RRSP account with Peters’ company and transferred the entire pension from her employer, which was just over $ 260,000. The full amount was used to purchase Colonial Coal shares.

The husband told Peters that his wife would continue to buy shares in the company, and Peters continued to recommend them. By November 2012, the woman’s accounts had bought around 974,300 shares for around $ 1,098,598, with almost the entire market value of her accounts being with Colonial Coal.

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