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Jun 19, 2020
CALGARY– June 19, 2020 – The Alberta Securities Commission (ASC) has issued a decision with respect to Kenton Roy Rustulka, finding him liable for breaches of his “know your client” (KYC) and suitability obligations, and for making material misrepresentations to his clients regarding general and specific risks associated with exempt market securities.
From January 1, 2013 to June 3, 2016, while employed with WealthTerra Capital Management Inc. (WealthTerra) as an exempt market dealing representative, Rustulka sold approximately $6,500,000 in exempt market securities offered through WealthTerra, and earned approximately $460,000 in associated commissions. He was found to have reported false and misleading information on KYC forms and to have failed to properly identify his clients’ investment needs, objectives, financial circumstances and risk tolerances. Rustulka's clients (many of whom were seniors or close to retirement) were induced to invest in exempt market securities based on these representations, and because they believed he was "trustworthy and honest, based on his previous employment as an Edmonton police officer and as a senior pastor".
In its decision, the panel noted that the majority of the allegations in the Notice of Hearing were proven and that Rustulka "recommended securities purchases and investment strategies that were patently unsuitable for [the clients]. He further exacerbated the situation by making misrepresentations with respect to risk while over-estimating and over-emphasizing the potential upside."
A hearing management session will be held on June 25, 2020 to set a date for submissions with respect to sanctions. Following that, it will be determined what, if any, sanction or cost-recovery orders will be made against Rustulka.
A copy of the decision is is available on the ASC website at albertasecurities.com.
The ASC is the regulatory agency responsible for administering the province’s securities laws. It is entrusted to foster a fair and efficient capital market in Alberta and to protect investors. As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada's capital markets.
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Theresa Schroder Senior Advisor, Communications 403.297.4231
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