SOMBA K'E/YELLOWKNIFE - An Edmonton-based financial adviser has been fined $15,000 by federal regulators for improper trading three years ago in Yellowknife.

Bert Griffin: financial adviser was recently fined $15,000 for placing personal orders ahead of client orders.

Bert Griffin reached a settlement with the Investment Industry Regulatory Organization of Canada (IIROC) in August for violation of Universal Market Integrity Rules (UMIR) regulating client-trader ethics.

At the time of the violations in January and April 2006, Griffin was an adviser for the Yellowknife branch of Berkshire Securities. He now works in Edmonton as a senior financial adviser for Manulife Securities, which acquired Berkshire in 2007, but continues to retain many Yellowknife clients.

The IIROC investigation, which started in October 2007, revealed Griffin failed to give priority to client orders on three separate occasions and instead placed personal orders first.

As a result, on Jan. 27, 2006 three clients paid higher prices than Griffin for shares of Century Mining Corp., ending with a financial disadvantage of $500, $250 and $125 to each client respectively.

In other words, if Griffin had purchased his clients' stock first, instead of his own as per UMIR rules, his clients would have saved money.

In addition, on April 11 and 21, 2006 Griffin purchased personal shares of Discovery Air, filling his order ahead of his clients', resulting in several clients' orders going unfilled.

Griffin maintains he was given permission by each client to trade at the same time, which puts him well within UMIR rules.

"I made sure each of my clients knew that I intended to put my own money where my mouth is by buying stock," stated Griffin said in an e-mail response sent to Yellowknifer and to his clients.

According to Griffin, the orders in question were from clients who called him after his own orders were placed and wanted to buy stocks in addition to what they had previously indicated.

"The clients who traded Discovery Air alongside me all acknowledge that they knew I was purchasing shares for my own account at the same time and all of them provided IIROC with statements to that effect," he added.

But the IIROC disputed the applicability of the filed statements, which appear to come after the incidents. "A client cannot give blanket consent permitting the participant to trade ahead or alongside," IIROC stated in settlement reports.

"Where the client has specifically consented to the participant trading ahead or alongside that order, the consent must be recorded on the order ticket for the exception to apply," it added.

Griffin did not record consent on the ticket order and was therefore in violation of market rules despite the filed letters from clients, the regulator concluded.

"In addition, there were other instances during the relevant period that the respondent's poor order handling practices made it difficult to determine whether a contravention of UMIR had occurred," IIROC added.

Griffin blamed the poor record keeping on a "major car accident" which happened while relocating his office to Edmonton in May 2006. The accident "resulted in the destruction of my office computer and some files, all of which obviously affected my record keeping," he said.

Griffin also said any financial disadvantage to his clients resulting from his trading "was corrected so that no client was disadvantaged at the end of the day."

He did not elaborate on whether this means he reimbursed clients but did add: "I am truly sorry for any concern this is causing and you can be rest assured we always put our clients first."

Griffin will also have to complete a conduct exam and a trader training course exam within six months and pay an extra $5,000 in costs to IIROC as part of the settlement.