Canada’s stockbroker regulator has fined now former Assante Capital Management’s John David Lunam $30,000, and suspended him from the industry for 18 months, for facilitating off-book investments without the knowledge or consent of his firm and using personal emails to conduct securities transactions.
On Nov. 7, the Canadian Investment Regulatory Organization (CIRO) agreed to a settlement agreement with Lunam, who has worked in the securities sector in a registered capacity since 1988.
Lunam facilitated off-book investments in unapproved private placements for five companies by 19 clients who collectively invested approximately $316,500 in the private placements, the settlement states.
Lunam was the one who solicited his clients to invest, suggesting the dollar amount and providing them with written materials which contained positive information about the companies.
Lunam first learned about the investments from B.C. penny stock promoter Robert Hillis Miller, who Lunam described to clients in “very favourable terms,” according to CIRO.
“I can attest that he (Miller) is a legend around Vancouver for these abilities,” Lunam told clients.
Miller, in fact, has a history of fraud in penny stocks.
On June 16, 2023, a U.S. jury found Miller liable for securities fraud, unregistered offerings, and beneficial ownership reporting violations based on his conduct as the CEO of Abakan, Inc., following a civil complaint from the U.S. Securities and Exchange Commission. Miller was recently barred from the industry for 10 years.
Miller was involved with each of the private placements Lunam sold to clients; however, the SEC complaint was not related to them, the settlement states.
Lunam learned about the SEC complaint shortly after it was issued but did not inform Assante nor his clients, according to the settlement.
Lunam did not receive compensation for his role in facilitating the private placements and admitted his misconduct during his investigatory interview which facilitated the expeditious completion of the investigation, noted CIRO.
Lunam began working at a Vancouver business location of Assante Capital Management Ltd. in 2000 until he was dismissed in 2022.
