Investment Dealers Association of Canada - Street Wire
IDA finally targets Crystallex booster Robb
Investment Dealers Association of Canada *IDA
Mon 29 Oct 2001 Street Wire
Also Foran Mining Corp (KRY)
Also Crystallex International Corp (FOM)
by Brent Mudry
Any suggestion that the Investment Dealers Association of Canada
aggressively pursues troubled B.C. brokers is likely to be dispelled by the
case of Douglas Bruce Robb, a Vancouver Island broker who left the industry
three and a half years ago amid a series of complaints.
In a notice of hearing dated Oct. 11 and announced Oct. 29, the IDA's
Pacific District Council is charging Mr. Robb, not with any client account
irregularities, but with snubbing IDA investigators since January, 1999.
The five noted clients filed written complaints dating back to Feb. 19,
1996, a year before Mr. Robb ended his 6-1/2 year career as a broker on
April 28, 1998, and up to Sept. 27, 1998.
Although Mr. Robb's complaining clients are identified only by initials,
the IDA notice makes no apparent mention of Vancouver dentist Donald Clark,
who launched a lawsuit against Mr. Robb on Oct. 25, 1999, claiming the
broker urged him to stuff his "low-risk" account with $300,000 worth of
volatile Crystallex International shares over a five-year period.
Less than six weeks after ending his brokerage career, Mr. Robb, a close
associate of Victoria-based Crystallex promoter Greg Pearson, was hired by
Mr. Pearson as vice-president of corporate development of Foran Mining,
another penny stock promotion. Judging by the IDA's notice of hearing, it
is unlikely the regulator will have any interest in probing deeper into
broker Robb's extensive touting of Crystallex.
(While Crystallex's legal battle in Venezuelan courts over the Las
Cristinas deposit has been highly controversial at best, Foran has had its
own troubles, including taking a $12-million exploration property writedown
two months ago.)
Court documents note dentist Mr. Clark opened an account with Mr. Robb at
ScotiaMcLeod in November of 1994 and followed the broker to Nesbitt Burns,
now BMO Nesbitt Burns, in February of 1995 and Midland Walwyn Capital, now
Merrill Lynch Canada, in May of 1997.
In its two-week-old notice of hearing, the IDA alleges Mr. Robb failed or
refuse to comply with association requests to chat with investigators
probing five complaints, between January, 1999, and Oct. 11, the date of
the notice.
The first noted complaints were filed Feb. 19, 1996, by ScotiaMcLeod
clients L.I. and B.I., who complained to the brokerage about how their
accounts were handled, including allegations of unsuitable trading
recommendations, unauthorized trading and discretionary trading. Copies of
these and the other complaint letters were sent to the IDA.
In the third complaint, dated May 15, 1997, client J.E.M. complained to the
IDA on her behalf and that of client M.J.S. that Mr. Robb, while handling
their RRSP accounts at ScotiaMcLeod and Nesbitt Burns, made unsuitable
recommendations, unauthorized trading and discretionary trading. J.E.M. had
previously sent written complaints to the two brokerages.
In the fourth complaint, sent to the IDA Sept. 27, 1998, client P.J.L.
alleged that Mr. Robb had miscalculated the value of the P.J.L. and A.L.L.
account holdings, which led to their decision to liquidate their holdings
and close the accounts on Jan. 6, 1998.
After years of chasing Mr. Robb for a response to these five complaints,
the IDA has finally launched its hearing. In its notice, the regulator
claims its potential penalties can include a reprimand, a fined of
$1-million per offence, and supension, revocation or prohibition of
approval of Mr. Robb.
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