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by Mike Caswell

The Investment Industry Regulatory Organization of Canada has imposed $930,129 in penalties (almost certainly uncollectable) and a permanent ban on Jayanth Noronha, a fired Raymond James Ltd. employee, for conduct "as disgraceful and egregious and one could imagine." Mr. Noronha accepted undisclosed payments from public companies in what IIROC calls off-book transactions. At the same time, he used client accounts to subscribe to private placements in those same companies, IIROC says.

The sanctions for Mr. Noronha are contained in a decision released on Monday, April 3. His penalty includes disgorgement the $669,500 that he received from the public companies, a $200,000 fine and payment of $60,629 in IIROC's costs. In addition, IIROC has permanently banned him from approval in any registered capacity, which means that he can never be an investment adviser in Canada again.

In handing down the penalties, IIROC describes Mr. Noronha's conduct as being deliberate and dishonest. Over a period of 2-1/2 years he bought $5.4-million worth of shares in his client's accounts. At the same time, he took steps to conceal payments he was receiving from the same public companies. He had the payments sent to accounts in his wife's name, among other things. "This is a classic example of a conflict of interest that totally undermines the public's confidence in the investment industry," the decision reads.

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