Panel flags red‑flag blind spots in concentrated junior mining trades
A Vancouver advisor has been handed a three‑month suspension and more than $120,000 in financial sanctions after regulators found he failed his gatekeeper duties over concentrated, suspect trading in a junior mining stock.
A Canadian Investment Regulatory Organization (CIRO) hearing panel ruled that between July 2019 and March 2020, while he was a Registered Representative at the Vancouver branch of PI Financial Corp., now Ventum Financial Corp., Randy Bryan Hildebrandt did not make “sufficient and reasonable or diligent inquiries” into client trading.
The trading involved common shares of an exploration‑stage issuer listed on the Canadian Stock Exchange.
The panel said his conduct was “grossly negligent” and showed “reckless indifference” to his gatekeeper obligations under IDPC Rule 1400.
CIRO found that a small group of related client accounts associated with one individual, MV, and his circle came to dominate trading in the issuer’s stock.
Those accounts controlled more than 13 percent of the issuer’s outstanding shares through Direct Registration System deposits and, over several months, accounted for the majority of trading volume and value.
Trading patterns included small buys followed by much larger sells at similar prices, cross trades between accounts entered within seconds of each other, and frequent use of early settlement to immediately withdraw proceeds.
The panel highlighted a turning point in September 2019, when a referred client emailed Hildebrandt to say, “Hi I want to make sure that [MV] does not use my account for any stock deals. If you can close my account, it would be greatly appreciated,” and added in another message, “[MV] wanted me to be a nominee on a stock he is promoting.”
The panel described the use of nominees as a classic feature of manipulative trading and said that, in the context of the concentrated holdings and market dominance already evident, those emails should have been a “ringing alarm bell” that triggered probing questions or escalation to compliance.
The panel stopped short of finding proven market manipulation or a confirmed “nefarious purpose” behind the trading.
It said the activity was consistent with market abuse and posed a serious risk to market integrity, but suspicion alone did not amount to proof.
Even so, the panel found no evidence that Hildebrandt made the kind of targeted inquiries a diligent advisor should have made into the source of the shares, the relationships among the account holders, their economic rationale for trading, and the extreme concentration and dominance in the stock.
After an August 5 sanctions hearing, CIRO ordered that Hildebrandt be prohibited from approval in any capacity in the securities industry for three months, effective within 30 days of the November 12 sanctions decision.
On readmission, he will work under strict supervision for 12 months and must successfully complete the Code and Practices Handbook examination, or an equivalent CIRO may introduce, by December 31, 2026.
The panel also imposed a $60,000 fine, ordered disgorgement of $12,372.55 in commissions from the impugned trading, and awarded $50,000 in costs.
Enforcement staff had pushed for a one‑year suspension, while the defence argued that anything beyond 30 days would likely end his career by undermining his client base.
The panel rejected both positions as disproportionate.
It found that a one‑year suspension would be excessive in the absence of proven market abuse or quantifiable investor harm.
However, it also dismissed the claim that a three‑month suspension would necessarily be career‑ending, noting the lack of concrete financial evidence and relying on its own expertise about the impact of suspensions on experienced advisors.
The decisions note that the violations occurred while Hildebrandt was registered with PI’s Vancouver office and that he continues to be employed there in a registered capacity.
