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by Mike Caswell
The Investment Industry Regulatory Organization of Canada has imposed an 18-month suspension on former BMO Nesbitt Burns Inc. employee Paul Brum for excessive trading that inflicted losses in the hundreds of thousands of dollars on three clients. The regulator says that the trading contributed to Mr. Brum earning $396,542 in fees from one of his clients over a six-year period. That client, meanwhile, suffered losses that later resulted in BMO paying out $560,000.
The suspension for Mr. Brum is contained in a settlement agreement that IIROC released on Monday, Oct. 26. In addition to the 18-month suspension, Mr. Brum must pay a $10,000 fine, an amount that would be higher were it not for his inability to pay. He must also serve 12 months of supervised release should he return to the industry.
The penalties, as set out in Mr. Brum's settlement, stem mostly from trades he made in the account of a client that IIROC only identifies as "SF." According to IIROC, the client had opened several accounts with Mr. Brum in April, 2010. Her account opening documents indicated that she had a low tolerance for risk and may require income from her portfolio.
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