Thursday, 19 April 2012
Please don't allow your investment advisor to forge your signature
Two investment advisors, namely, Mark Steven Rotstein and Jessica Elizabeth Zackheim, were reprimanded yesterday by the Investment Industry Regulatory Organization of Canada ("IIROC") for forging their client signatures for more than a decade. In October of 2011, IIROC filed allegations that the pair had forged client signatures for over a decade on documents including trading authorizations, private placement subscription forms, U.S tax certifications, fee schedules and risk disclosure, contrary to IDA ("Investment Dealers Association") By-law 29.1 and IIROC Dealer Member Rule 29.1.
According to the Financial Post the pair, who managed more than 2,000 client accounts at RBC Dominion Securities with assets valued at about $500-million, were terminated for cause by RBC in April of last year (2011), according to a regulatory filing in connection with the case. They began working at Scotia Capital Inc. the following month, albeit with “terms and conditions” imposed on their regulatory registration, including strict supervision and controls on client signatures. They are still there, a spokesperson for Scotia Capital, the broker-dealer arm of Bank of Nova Scotia, confirmed Tuesday.
Well, I am a loss for words. After all in this day and age of post Madoff - allowing anyone to forge your signature is just plain foolish. No financial harm came to the clients of these investment advisors as the signatures were forged not for personal gain or for fraudulent purposes but merely to avoid the clients from the hassle of having to come to the offices of the investment advisors to sign. But we must remember allowing an investment advisor to forge your signature is not the same as a kid forging their parent's signature on a poor grade assignment. It is much more serious. It is human nature to trust easily. And one only needs to read Vanity Fair's article on Madoff to see how easily one can be duped.
The advisors will be able to serve their one year suspension in two six months stint as long at it completed by October 15, 2014 thereby allowing them to return to work. Mr. Rotstein will pay a $250,000 fine to the IIIROC. Ms. Zackheim will pay a fine of $50,000, and the pair will also pay $10,000 in costs.