STREETWIRE - Singh Bhatti more scum
TD Securities, ex-B.C. broker face $300,000 client suit
2002-09-09 17:41 PT - Street Wire
by Brent Mudry
TD Securities and a terminated Vancouver-area broker face an unsuitable investment suit from an inexperienced client who claims he lost more than $300,000 of his $385,000 account in less than 18 months, including a $100,000 loss in the month of October, 2000. In a statement of claim filed Friday in the Supreme Court of British Columbia, Peter De Jong claims TD broker Dale Singh Bhatti carried out extensive unauthorized margin and investment trading, disregarded his low risk tolerance and misled him about the plunging status of his accounts, which represented the bulk of his family's life savings.
The allegations in the suit, filed by Vancouver lawyer Stephen Fitterman of Shapray Cramer, have not yet been proven in court and no statements of defence have yet been filed by TD Securities or Mr. Bhatti, of Coquitlam. The plaintiff is Shawmegess Holdings Ltd., Mr. De Jong's holding company for his building supply business in South Hazelton, B.C.
The suit claims that Mr. De Jong, married with four children, invested conservatively in treasury bills and guaranteed investment certificates until April, 1999, when he opened a $380,000 account with TD Evergreen broker Richard Kwan. "When he opened the investment accounts, Kwan knew that De Jong was a very inexperienced and naive investor." The account opening forms stated Mr. De Jong had "limited" investment knowledge, had objectives of 20-per-cent income, 20-per-cent short-term trading and 60-per-cent long term capital gains and had a "medium" level of investment risk tolerance.
Broker Mr. Bhatti inherited the account a few months later, in August, 1999, when Mr. Kwan, who had invested the account in conservative fixed income and blue chip stocks, left TD Evergreen. The suit claims Mr. De Jong's account collapsed under Mr. Bhatti's lead in the months that followed. Mr. De Jong claims that in February, 2000, Mr. Bhatti urged him to invest on a takeover rumour, and as his account was already fully invested, urged him to gamble by opening a margin account. "Bhatti only provided De Jong with a cursory explanation of how a margin account functions and neither explained nor identified the risks associated," states lawyer Mr. Fitterman in the suit.
Mr. De Jong claims that although this margin account was to be used rarely, Mr. Bhatti put dozens of trades through his margin accounts between March 1, 2000, and Dec. 31, 2000, without his knowledge or authorization in the "vast majority" of cases. The trading spree ended badly, as TD executed a margin call in December, 2000, reducing the value of the De Jong accounts to $85,000. The accounts fell further when Mr. De Jong closed out his margin accounts.
While TD terminated Mr. Bhatti effective Feb. 12, 2001, the suit claims the brokerage has never disclosed the reasons for his termination. The suit seeks unspecified damages, a full accounting, and punitive or exemplary damages.
According to British Columbia Securities Commission registration records, Mr. Bhatti started his disastrous two-year career at TD Securities in January, 1999, after a four-year hiatus from the industry. Mr. Bhatti, first registered at Scotia Capital in July, 1992, served short stints there, then at RBC Dominion Securities and BMO Nesbitt Burns until his registration lapsed in October, 1994. |
