News

A few years after immigrating to Canada, a middle-aged couple opened an account with a full service investment firm and deposited $80,000 from the sale of their home in the UK and the husband's severance pay.

Nearly three-quarters of a 91-year-old client's account at a full-service brokerage firm was invested in a bond mutual fund. The investment advisor convinced the client's son, who held Power of Attorney for the client, to switch the investment in the no-load bond fund to the back-end load version of the same fund. The mutual fund company paid the advisor and the brokerage firm a $30,500 commission for the switch.

A couple decided to sell their house and buy one better suited to their needs. They contacted their bank and inquired about their financing options for their future house. They also asked about the effect an early discharge would have on their existing mortgage and were advised that an early discharge would result in the bank charging them a $4,000 prepayment fee.

An established merchant specializing in product sales through telemarketing decided to begin accepting credit card payments. His bank set up a merchant credit card account during a brief exchange over the phone and he was faxed documents to sign.

A client and his friend went to a night-club one evening after having several drinks at home. The client was intoxicated by the time they arrived at the club, but he ordered and paid for a round of drinks. He then left his wallet containing his bank debit card on the table while going to the washroom. When the client returned to the table he did not notice that his wallet was gone. Shortly afterwards, the client and his friend left.

Unsuitable investment recommendations were made for a client, for which her investment firm offered to compensate her $30,000. The client turned down the firm’s offer and appealed to OBSI. On closer scrutiny, however, OBSI concluded that the client should be compensated only $20,000.

The investor, a client of a full-service investment dealer, conducted more than 200 trades in an eight-month period. He then moved his account, claiming that he had suffered losses as a result of the advisor “churning" his account. (Churning is excessive trading by an advisor to maximize commissions.) The investor also said the stocks bought and sold were overly concentrated in the volatile high tech sector.