Lawrence Chang, a former retail investment advisor with Canaccord Genuity Corp., violated a number of industry bylaws while working at the company’s Vancouver office in 2008, an investment industry regulator said Wednesday.
These included purchasing $498,160 worth of an unnamed security in a client account without being authorized to do so by his client, according to a an enforcement decision released by the Industry Regulatory Organization of Canada (IIROC).
It is clear from the decision documents that the unnamed security was USA Superior Energy Holdings Inc.
, Stock Forum
) a U.S. over-the-counter stock that traded at a fraction of a penny this week.
Following a disciplinary panel hearing earlier this year, an IIROC panel said Chang made misrepresentations to the client regarding the number of shares held in his client's account to hide the fact that he had made the unauthorized stock purchases.
The IIROC hearing panel dismissed another allegation that Chang had engaged in discretionary trading.
The violations occurred between December 31, 2007 and May 2008, eventually prompting a dispute between Chang and his Europe-based client regarding over one million shares of USA Superior Energy Holdings
in the account.
The former Canaccord advisor did not testify at the hearing, leaving IIROC to rely on email conversations between the advisor and his client.
But in a videotaped interview in December 2010, IIROC said Chang could not recall the theory behind building up such a large position in USSU.
“He also could not recall any discussions he may have had with his client about USSU during the time that Chang’s stake in the company increased from 30,000 shares to over one million shares,’’ IIROC noted in its decision.
The regulator said it launched an investigation into Chang’s conduct in January 2010. Penalties will be determined following a separate hearing into the case.
Chang is no longer employed at Canaccord.