National group seeks to collect $115K from P.E.I. investment adviser

The national group that oversees investment dealers has filed papers in P.E.I. Supreme Court to collect an unpaid fine of $115,000 from a P.E.I. investment adviser. John Phillip Watts was ordered to pay the fine in April by the Investment Industry Regulatory Organization of Canada (IIROC).

The fine was ordered as part of a settlement Watts agreed to April 13, 2016. He was also told to pay $20,000 in costs.

However, according toIIROCWatts has yet to pay the fine.

According to the April 2016 decision byIIROC, Watts admitted failing to use due diligence to ensure that recommendations were suitable for four clients, between July 2007 and December 2010, and for engaging in unauthorized trading.

• John Phillip Watts, investment advisor, ordered to pay $115K in fines

That's why IIROC has received permission from the P.E.I. Office of the Superintendent of Securities to enforce the fine payment by filing the decision with the Supreme Court of P.E.I. The papers were filed Nov. 10.

Can garnish wages, seize assets

Filing the decision "will treat our decision like a civil judgment. This will allow IIROC to take any enforcement action associated with Supreme Court orders such as garnishing wages or seizing assets," Andrew Kriegler, IIROC President and CEO,wrote in an email to CBC.

He said IIROC does collect fines from dealer members, but"collecting from individuals has proven to be much more challenging." In 2015, IIROClevied $4.5 million against firms and individuals in Canada but collected less than 20 per cent of fines against individuals.

According to Kriegler, there are nearly $30 million in outstanding uncollected fines against individuals.

Changes sought to'strengthen investor protection'

The group is working to get provinces across the country to amend their provincial securities acts to make it easier to collect fines against those who have been disciplined. This will "strengthen investor protection," said Kriegler.

Alberta and Quebec allow IIROC to do that now. P.E.I. requires authorization first from the Superintendent of Securities.

"IIROC continues to work closely and collaboratively with all securities commissions across the country in order to protect investors, deter wrongdoing and strengthen our overall enforcement efforts," said Kriegler.

"Currently we are in ongoing discussions with P.E.I. to make the process more efficient."

In an email, the Department of Justice and Public Safety confirmed IIROChas contacted the province about making amendments to allow directcollection of fines.

"Prince Edward Island continues to participate in this ongoing policy dialogue with IIROC," said the statement.

CBC was not able to reachJohn Watts for comment on the outstanding fine.