15 years ago, Louise Field turned to Simon Jaques for financial investment advice after her father recommended him. She handed the broker at Mackie Research Capital over a million dollars stemming from an inheritance. Little did Field and her husband know, that by 2011 the account had dwindled down to just $45,000.
In filling out her new client application form, Field stated she wanted him to keep her money in low and medium-risk investments. But instead, as they realized later, her broker allocated her funds into risk investments she didn’t authorize and then took excessive commissions based on these investments.
Over the years Fields did withdraw money for a $500,000 condo and expected living expenses, but after Jaques told the couple they were almost broke due to the market downturn in 2008 and excessive spending, they decided to take a closer look at their statements.
What they found out, they couldn’t understand and Fields’ husband Jonathan Haddon wishes that they looked closer at their statements and noticed the abundance of activity on her account. But what statements they did look at were “confusing,” and had trouble understanding.
Jacques took more than $253,000 in commissions and applied a “churning,” strategy to the way he invested their money. Churning is an illegal and unethical practise of buying and selling of securities specifically to generate commissions. At the same time that Jacques was generating excessive commissions, the market was doing well and Fields could have doubled her portfolio if she had invested her portfolio in a broad market index such as the Toronto Stock Exchange Index.
Jacques made a high number of risky trades over the four-year period, involving various speculative penny stocks. In general the higher the stock’s risk the bigger the commission paid to the broker and investment firm. But in 2014, the Investment Industry Regulatory Organization of Canada (IIROC) fined Jaques $80,000 for failing to ensure that investments he made for Field were suitable for her and failing to co-operate with its investigation.
Jaques was also permanently banned from his registered advisor position and was ordered to pay $20,000 in costs. To date, Jaques has not paid any of his fines and unlike in Ontario, P.E.I., Alberta and Quebec the IIROC doesn’t have the power in B.C to use courts to collect fines.
These financial worries have caused Haddon to delay his retirement from his job as a mental health worker. Louise Field has multiple sclerosis and it’s prevented her from working for the last three decades. The court case has been adjourned because of Fields deteriorating health, and no future date has been set.
Read the full story at CBC British Columbia