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by Mike Caswell

The B.C. Securities Commission has upheld $126,813 in fines that Victoria broker Carolann Steinhoff received for placing a young couple into unsuitable investments, but has rejected a suspension. A BCSC panel has ruled that any meaningful suspension would be too severe a sanction, given that it could effectively ruin her career. The decision is a review of an earlier ruling by the Investment Industry Regulatory Organization of Canada which, in addition to the fine, had suspended her for one year.

The penalty, handed down on Friday, Jan. 17, marks the third time that IIROC and the BCSC have disagreed on an appropriate sanction for Ms. Steinhoff. In two prior rulings, the BCSC entirely overturned fines that IIROC had imposed on her. With Friday's ruling, the BCSC has left her fine intact, but has declined to impose a suspension that IIROC had found was necessary, given conduct it described as egregious.

The penalties handed down Friday stem from losses that a young Victoria couple suffered in the summer of 2008. They had approached Ms. Steinhoff to invest $125,000 that they were holding from the sale of their house. They needed the money for a down payment on a new house they were to buy in three months. Ms. Steinhoff invested the couple's down payment in stocks ranging from banks to junior mining companies, with a substantial amount of the investments purchased on margin. Unfortunately for the couple, the market suffered a severe downturn in August, 2008, and the couple incurred a $69,096 loss.

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