An IIROC hearing panel has fined an advisor $60,000 for accepting entertainment event tickets from mutual fund company representatives.
Between June 2014 and July 2016, Sam Deones Panzures asked representatives from Sentry Investments Inc. and Dynamic Funds for tickets to a concert and Formula One and Indy races, the settlement agreement says. He accepted a total of 32 tickets worth more than $32,000 combined. Panzures repaid $28,430 of this amount in September 2016.
During the relevant period, Panzures worked at HollisWealth, which was operated by Scotia Capital Inc. and subsequently acquired in 2017 by Industrial Alliance Securities Inc., where Panzures still works. He started Panzures Wealth Management in 2012 with two other advisors, and has been registered since 1987.
During the period, Panzures Wealth Management’s book of business had more than 850 households with about $400 million in assets under management, the settlement agreement says. About 62% to 69% of Panzures’ client investments were in mutual funds of Sentry Investments Inc. and Dynamic Funds. Panzures historically held most of his client’s investments along with his own in these mutual funds, says the agreement. It further says there are no client complaints related to the tickets.
HollisWealth compliance manuals from 2013 to 2016 stated that advisors couldn’t accept gifts of more than a nominal value from any person or business that the firm did business with, the settlement agreement says. Reps who accepted gifts had to report them to the firm’s compliance department to ensure they complied with CSA’s National Instrument 81-105.
Panzures completed “annual attestations with HollisWealth,” says the agreement, acknowledging that he was familiar with both the firm’s code of conduct and relevant compliance manuals. The agreement further says Panzures admitted he was aware of, and familiar with, applicable regulatory requirements, including NI 81-105.
Panzures’ position was that he intended to repay the Formula One tickets. Further, Panzures believed and was advised by Sentry and Dynamic that they were compliant with their own internal rules and therefore Panzures believed he was compliant with those of his firm, says the agreement.
After these events, Panzures’ holdings of Sentry and Dynamic decreased as a percentage of his assets under management, the settlement agreement says. Panzures also initiated a protocol at his firm requiring advisors to complete a form before asking a fund company for promotional items, including tickets, to ensure compliance with NI 81-105.
Panzures has no previous disciplinary history.
In addition to the fine, he must pay costs of $5,000.
Read the full settlement agreement here.
Sentry was previously fined $1.5 million by the OSC to settle allegations it engaged in improper sales practices by giving extravagant gifts to top-selling dealers between 2011 and 2016.