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

P.E.I. investment advisor John Phillip Watts has been ordered to pay $115,000 in fines for issues related to money he invested for clients.

The fine is part of a settlement Watts agreed to with the Investment Industry Regulatory Organization of Canada (IIROC), the national self-regulatory organization that oversees investment dealers in Canada.

That settlement was approved April 13.

According to IIROC, Watts admitted failing to use due diligence to ensure that recommendations were suitable for four clients, between July 2007 and December 2010.

IIROC said the clients were on limited incomes and the investments were mainly in high risk securities in companies based in China. IIROC saidthe value of their investments dropped from between $30,150 and $122,363.

The second violation is of engaging in unauthorized trading, specifically that between May and June of 2008, he traded in accounts of one estate client with instructions from only one of the three executors.

In addition to the fine, Watts will have to pay $20,000 in costs.

According to a release from IIROC, it began its investigation into Watts' actions in March 2012.

Can't reregister until June,2017

At the time of the violations, Watts worked with Wellington West Capital Inc., which has since been acquired by National Bank Financial Ltd. Watts is still registered there, but has been on medical leave since 2011 and has told IIROC he doesn't intend to return to the securities industry.

However, as part of the settlement he's banned from applying to re-register as an investment dealer until June 30, 2017, and if he is registered again, he has to be under "strict supervision" for six months.

IIROC has withdrawn the charge against Sean Thomas Hickey. He and Watts were investment partners, but Hickey was not the primary advisor to the clients involved in these violations.

Watts had been disciplined previously by IIROCin 2008.