A retired financial planner will face a disciplinary hearing over allegations he failed to properly inform numerous clients of the risks in an investment strategy that resulted in “significant’’ losses.
Lloyd Snyder will face a hearing panel of the Mutual Fund Dealers Association of Canada May 1 by teleconference.
The 70-year-old Snyder is accused of convincing at least 15 clients to apply for, and obtain, loans totalling more than $1.3 million to implement a leverage investment strategy in their accounts without properly explaining the risks.
Snyder recommended to at least 15 clients, between 2005 and 2007, that they apply for and obtain one or more investment loans in order to purchase ROC mutual funds for their accounts.
He is accused of failing to consider, adequately or at all, whether the clients could withstand investment losses without jeopardizing their financial security if the leverage investment strategies did not perform as Snyder represented they would.
“At all material times, the respondent knew, or ought to have known, that the investment loans were excessive having regard to the clients’ net worth,’’ reads a 14-page outline of the charges.
“As a result of implementing the leverage investment strategies, all of the clients incurred significant investment losses in amounts to be quantified prior to the hearing on the merits. These investment losses have jeopardized the financial security of the clients.’’
During the period, Snyder recommended and implemented the leverage investment strategies in the clients’ accounts, the policies and procedures of the company he was working for at the time provided that only clients with high-risk tolerance could utilize leveraging.
It is believed none of the 15 clients named in this case had a high-risk tolerance at the time Snyder recommended the use of leverage. One couple took out loans totaling $330,700.
The hearing panel has the power to impose a reprimand, a fine up to $5 million per offence and an amount equal to three times the profit obtained or loss avoided by Snyder as a result of committing the violation.
The panel also has the power, if Snyder is found to have committed a violation to prohibit him from conducting securities related business in any capacity for any period of time.
Snyder has been registered in the securities industry since 1986.
From October 2003 to July 2010, he was registered in P.E.I.,
Nova Scotia, New Brunswick, Quebec, Manitoba, Saskatchewan, Alberta, and B.C. as a mutual
fund salesperson with Investia Financial Services Inc., a member of the Mutual Fund Dealers Association.
Snyder resigned from Investia effective Aug. 1, 2010. He is not currently registered in the securities industry in any capacity.