By way of an Offer of Settlement, David Allan
Zosiak ("Zosiak"), at the time of the infraction an Approved Person employed by
Wolverton Securities Ltd. ("Wolverton"), has agreed to the imposition of the
following penalties by the Exchange for violation of Exchange Rule F.2.22.2(a):
- payment of a fine in the amount of $5,000;
- withdrawal of Exchange approval for a period of 1 year;
- should Zosiak return to the industry, a requirement to re-write and pass the examination
based on the Conduct and Practices Handbook for Security and Industry Professionals and to
be placed on strict supervision for a period of one year, and
- an assessment of investigative costs in the amount of $2,000.
Rule F.2.22.2(a) states in part, that investment advisers shall not,
subject to Rule F.3.04, handle a discretionary order or exercise any discretion in the
handling of an account.
During the period of June 1996, to August 1996, Zosiak exercised
discretion in one of his client accounts, executing 40 trades in ten securities listed on
the Exchange and/or the Alberta Stock Exchange valued at approximately $877,400. The
client had not given authorization for Zosiak to exercise discretion over the account and
Wolverton had not accepted the account as discretionary. Zosiak thereby violated Exchange
Rule F.2.22.2(a).
No fault was attributed to the Member Firm, who reported Zosiak’s
conduct to the Exchange and terminated his employment.
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