Assante Capital Management Ltd. has agreed to pay a fine of $400,000 and cover costs to the Investment Industry Regulatory Organization of Canada.
The wealth management firm operated in Red Deer by a man convicted of killing a former client with a bomb.
The settlement came after an Oct. 13 hearing before an IIROC panel. At issue was the firm’s failure to meet supervisory obligations of its Red Deer branch.
The investigation covered the period between January 2007 and May 2012. During that time Brian Andrew Malley was a registered investment representative, and Christine Marie Malley was the branch manager of Red Deer Assante Capital Management.
In the settlement there were several issues raised with how the Red Deer branch was run. Including a three-year lapse of audits from June 2007 to November 2010, high monthly commissions and failing to supervise a potential conflict of interest, as Brian and Christine are married.
Brian and Christine were also subject to a separate hearing, but they did not attend and have not contested or admitted the allegations. The hearing was conducted on June 25, 2014 in absentia. Brian was fined $300,000 as well as costs to the IIROC totalling $35,000. Christine was fined $250,000 as well as costs valued at $15,000.
At the June 2014 hearing, it was concluded that most clients between 2005 and 2012 suffered substantial losses in their accounts ranging from 23 to 54 per cent.
“The panel found that Christine Malley as her husband’s supervisor approved client accounts with inappropriate investment and risk parameters; failed to take the necessary actions to prevent him from engaging in highly aggressive trade strategies; and failed to undertake any meaningful supervision with respect to the activities in his clients’ accounts.”
A class action lawsuit launched against Assante and the Malleys was settled at $10 million in October. The class action suit needs to be certified at hearing at the Red Deer Court house on Nov. 30.
Brian was also convicted of first degree murder in February of this year for the 2011 bombing death of Victoria Shachtay, 23.
Shachtay, a quadriplegic single mother, was killed when she opened a gift disguising a bomb left on her doorstep.
Brian had been her financial advisor. Shachtay invested $575,000 in 2007 from a settlement she received following a 2004 car crash. The crash left her confined to a wheelchair. By April 2011 her invested money was gone. From April to October, 2011 Brian had transferred more than $44,000 from his personal accounts to Shachtay’s accounts.
The conviction is under appeal and is scheduled to be heard on Jan. 6, 2016 in the Calgary Court of Appeal.