Olea, Luis German - Opportunity to be Heard
In the Matter of the Registration of
Luis German Olea
Opportunity to be Heard by the Director
Subsection 26(3) of the Securities Act, R.S.O. 1990, c. S.5
Luis German Olea
Opportunity to be Heard by the Director
Subsection 26(3) of the Securities Act, R.S.O. 1990, c. S.5
| Date of decision: | June 2, 2009 |
| Director: | Erez Blumberger Manager, Registrant Regulation Ontario Securities Commission |
| Written Submissions by: | Rebecca Stefanec, Registration Officer Michael Denyszyn, Legal Counsel For staff of the Ontario Securities Commission Luis German Olea For the Registrant |
Background
[1] Luis German Olea (the Registrant) has been registered under the Securities Act, R.S.O. 1990, c. S.5 (the Act) as a mutual fund salesperson for PFSL Investments Canada Ltd. (PFSL) since February 13, 2004.
[2] On February 12, 2009, PFSL submitted a financial disclosure change notice to the Ontario Securities Commission (OSC) indicating that the Registrant had filed a consumer proposal under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, on February 5, 2009.
[3] On March 27, 2009, OSC staff sent a letter to the Registrant and to PFSL proposing terms and conditions for monthly close supervision reporting, be imposed on the registration of the Registrant.
[4] The Director may restrict a registration by imposing terms and conditions under section 26 of the Act, but must provide the registrant with the opportunity to be heard by the Director.
[5] The Registrant requested an opportunity to be heard through written submissions. The Registrant’s submission was received on April 17, 2009. The submission of OSC staff was sent to the Registrant in a letter dated May 6, 2009.
Submissions
Summary of the Registrant’s submissions
[6] The Registrant asked that his registration not be cancelled or suspended so that he can continue working and servicing his clients at PSFL. He noted that he feels very optimistic about his future with PSFL.
[7] The Registrant explained that it was his marriage breakdown that led to his financial situation, resulting in his decision to file a consumer proposal.
Summary of staff’s submissions
[8] OSC staff recommended to the Director that the registration of the Registrant be subject to close supervision, as the filing for a consumer proposal has a bearing on the Registrant’s financial solvency because there is a risk that the Registrant may engage in self-interested activities at the expense of clients.
[9] It is OSC staff’s practice to impose close monthly supervisory terms and conditions on the registration of an individual who has filed a consumer proposal.
Analysis
Suitability for registration
[10] The fit and proper standard for registration is both an initial and an ongoing requirement for registrants. The fit and proper standard is based on three well established criteria that have been identified by the OSC:
The [Registrant Regulation] section administers a registration system which is intended to ensure that all Applicants under the Securities Act and the Commodity Futures Act meet appropriate standards of integrity, competence and financial soundness …
(Ontario Securities Commission, Annual Report 1991, Page 16)
[11] When analyzing these criteria staff consider:
- integrity – honesty and good faith, particularly in dealings with clients, and compliance with Ontario securities law;
- competence – prescribed proficiency and knowledge of the requirements of Ontario securities law; and
- financial soundness – an indicator of a firm’s capacity to fulfill its obligations and can be an indicator of the risk that an individual will engage in self-interested activities at the expense of clients.
[12] In this case neither the Registrant’s integrity nor his competence are in question. However, filing for a consumer proposal raises concern regarding the financial soundness of the Registrant. To mitigate the potential increased risk concerning self-interested activities by the Registrant, staff recommended that terms and conditions for monthly close supervision reporting be imposed on the registration of the Registrant.
[13] It is OSC staff practice to impose terms and conditions for monthly close supervision reporting on an individual’s registration should that person file for bankruptcy, receive a garnishment, receive a requirement to pay overdue taxes, or file for a consumer proposal. The terms and conditions are removed when the financial obligations resulting from the event have been satisfied. This practice is consistent with the investor protection mandate of the OSC.
Decision
[14] I find that the filing for a consumer proposal does have a negative impact on the Registrant’s financial soundness. While I am sympathetic to the Registrant’s personal circumstances which led to his filing for a consumer proposal, I am mindful of the investor protection mandate of the OSC. Accordingly, based on the submissions filed and the reasons set out above, it is my decision to impose the terms and conditions as set out in Exhibit A on the registration of Luis German Olea.
June 2, 2009
“Erez Blumberger”
Manager, Registrant Regulation
EXHIBIT “A”
Proposed Conditions For Registration
of
Luis German Olea
of
Luis German Olea
Monthly Close Supervision Reports are to be completed on the registrant’s sales activities and dealings with clients. The supervision reports are to be retained with the sponsoring firm and must be made available for review upon request.
These terms and conditions are to continue until the obligation has been satisfied and acceptable evidence has been provided to the OSC. These terms and conditions will be removed unless the Director has reason to believe that the registrant is not suitable for unconditional renewal of registration at that time.
| _______________________________ Approved Officer for PFSL Investments Canada Ltd. |
_______________________________ Luis German Olea |
| _______________________________ Print Name of Signatory Above |
|
| _______________________________ Date |
_______________________________ Date |
EXHIBIT “A” (cont.)
Standard Monthly Close Supervision Report*
Luis German Olea
Luis German Olea
I hereby certify that supervision has been conducted for the month ending ____________ of the trading activities of Luis German Olea, by the undersigned. I further certify the following:
- All orders from the salesperson were reviewed and approved by a compliance officer or branch manager of PFSL Investments Canada Ltd.
- There were no client complaints received during the preceding month. If there were complaints, a description of the complaint and follow-up action initiated by the company is attached.
- All payments for the purchase of the investments were made payable to the dealer. There were no cash payments accepted.
- The transactions of the salesperson were reviewed during the preceding month to ensure compliance with the policies and procedures of the dealer, including the suitability of investments for clients. If there were any violations, a description of the violation and follow-up action is attached.
________________________________
Signature
Compliance Officer/Branch Manager of PFSL Investments Canada Ltd.
Printed name of signatory above:
________________________________
Date
* In the case of violations or client complaints, the regulator must be notified within five business days.