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by Mike Caswell
The Investment Industry Regulatory Organization of Canada has imposed $139,054 in sanctions and a one-year suspension on Yonathan Chanoch Shields, a former employee of R.J. O'Brien & Associates Canada Inc., over an unsuitable options strategy. The strategy, which affected nine clients, collapsed in a single day of volatility in 2018, IIROC found. Clients suffered losses that IIROC calculates to be $1.22-million.
The penalties for Mr. Shields are contained in a decision that IIROC released on Monday, Jan. 10. The $139,054 sanction includes disgorgement of $64,054 in commissions, a $40,000 fine and $35,000 in IIROC's costs. Once he has served his one-year suspension, Mr. Shields must pass the Conduct and Practices Handbook test and spend one year working under close supervision.
The penalties stem from an options strategy that Mr. Shields used in the accounts of nine clients, starting in February, 2016. The strategy could supposedly generate a 20-per-cent return, but the risks were unsuitable for the clients, IIROC said. It involved uncovered options on futures that included the S&P 500 E-minis, crude oil, natural gas and gold.
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