On or around May 23, 2015, client A opened an account with the Investment Dealer ABC Securities Inc., through the Respondent.

Client A is an immediate family member of the Respondent and is a Related Person under the meaning of the Income Tax Act.

Since around April 25, 2015, the Respondent had acted as Power of Attorney for client A, under a general mandate to that effect.

The Respondent did not declare the situation to his employer, either when the account was opened or afterwards.

In no case was ABC Securities informed in a timely manner, nor did it approve this arrangement between the Respondent and client A.

Moreover, the Respondent allegedly proceeded to borrow money from client A, between March and October 2019:

March 27, 2019 $2,000

April 24, 2019 $2,000

June 7, 2019 $1,300

October 18, 2019 $1,000

Total : $6,300

The Respondent did not declare this situation to his employer. Consequently, ABC Securities was not informed in a timely manner nor did it approve these loans made to the Respondent by client A

i. Please make an introduction and outline based on the above.

The events described in this case led to the disciplinary process due to several violations and misconduct by the Respondent. Let's discuss the causes and the violations involved:

1. Conflict of Interest:

The Respondent acted as Power of Attorney for client A, who is an immediate family member and a Related Person. This created a conflict of interest as the Respondent had a personal relationship with the client, which could potentially compromise their objectivity and fiduciary duty to act in the client's best interest.

2. Failure to Disclose:

The Respondent did not disclose the situation of being Power of Attorney for client A to their employer, ABC Securities. This failure to disclose was a violation of the IIROC rules, as it is essential for firms to be aware of any potential conflicts of interest or relationships that may impact the client-advisor relationship.

3. Unauthorized Borrowing:

The Respondent allegedly borrowed money from client A without obtaining proper authorization or disclosure. This is a violation of IIROC rules, as it is essential for advisors to maintain high ethical standards and not engage in personal financial transactions with clients that can compromise their independence and objectivity.

4. Lack of Timely Reporting:

The Respondent did not inform ABC Securities in a timely manner about the Power of Attorney arrangement or the loans from client A. This failure to report violated IIROC rules, as it is crucial for firms to be aware of any potential conflicts or financial arrangements that may impact the advisor-client relationship.

The IIROC rules that have been violated in this case include:

1. RUle 42 :

Conflict of Interest: This rule requires registrants to identify and address conflicts of interest and take reasonable steps to mitigate them. The Respondent's failure to disclose the Power of Attorney arrangement and the personal loans from client A violated this rule.

2. Rule 29 :

Borrowing and Lending: This rule prohibits advisors from borrowing or lending money to clients unless specific conditions are met, such as obtaining written approval from the firm. The Respondent's alleged unauthorized borrowing from client A violated this rule.

3. Rule 1,300:

Reporting Obligations: This rule requires registrants to promptly report any material information or changes that could reasonably be expected to have an impact on their suitability or ability to carry out their duties. The Respondent's failure to timely report the Power of Attorney arrangement and the loans from client A violated this rule.

To avoid being subjected to disciplinary action by the IIROC, the (alleged) offender should have acted differently in this particular situation. They should have:

1. Disclosed the Power of Attorney arrangement to their employer, ABC Securities, when the account was opened and throughout the relationship with client A.

2. Obtained proper authorization and disclosure before borrowing money from client A, following the firm's policies and procedures.

3. Reported the Power of Attorney arrangement and the loans from client A to ABC Securities in a timely manner, ensuring compliance with reporting obligations

ii. Please make a conclusion based on the above.