Case Summary

Hearing Panel Imposes Penalties on John Alojz Kodric

John Alojz Kodric entered into a Settlement Agreement with MFDA Staff. In the Settlement Agreement, Kodric admitted that he engaged in securities-related business not carried out for the account and through the facilities of his Member, contrary to MFDA Rules 1.1.1 and 2.1.1. In particular, Kodric facilitated the sale of shares of a company whose shares were not approved by Kodric’s Member for sale by its Approved Persons, to at least ten clients and two other individuals. He also admitted that he failed to ensure that leveraged investment strategy recommendations made to two clients were suitable, contrary to MFDA Rules 2.2.1 and 2.1.1. Kodric also admitted that he obtained and maintained eight pre-signed account forms and that he made changes to three account forms at the request of clients after the clients had signed them and without obtaining their initials to the changes, contrary to MFDA Rule 2.1.1. Kodric also admitted that he failed to abide by his Member’s request to not make contact with clients in response to a client complaint, contrary to MFDA Policy No. 3 and MFDA Rule 2.11.

The Hearing Panel accepted the Settlement Agreement. It imposed a one year prohibition; a fine of $45,000; costs of $5,000; and a requirement to comply with MFDA Rules 1.1.1, 2.1.1, 2.2.1 and 2.11 as well as MFDA Policy No.3 in the future. In imposing its penalty the Hearing Panel noted that it took into consideration the Ontario Securities Commission’s refusal to reactivate Kodric’s registration for one year.