IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, c. S.5, AS AMENDED AND IN THE MATTER OF AN APPLICATION FOR REGISTRATION OF JOHN ALOJZ KODRIC
DECISION OF THE DIRECTOR
1. John Alojz Kodric ("Kodric") applied for reactivation of registration as a dealing representative in the category of mutual fund dealer under the Securities Act, R.S.O. 1990, c. S.5 (the "Act") with Wealthforce Inc. (Wealthforce) (the "Application").
2. Kodric was previously registered as a dealing representative in the same category from 1998 to 2014. He subsequently applied for reactivation of registration, and his registration was refused after an opportunity to be heard before the Director. The reasons for the refusal of his registration are set out in the Director's decision dated September 22, 2015 (the "2015 Director's Decision").
3. While the Director refused Kodric's registration, she also found that should Kodric decide to apply for reactivation of registration after a period of at least twelve months from the date of the 2015 Director's Decision, Kodric may be suitable for registration subject to:
(a) Terms and conditions (including strict supervision by his sponsoring firm and prohibiting the use of leverage);
(b) Kodric demonstrating remorse for the misconduct set out in the 2015 Director's Decision; and
(c) Kodric demonstrating that he has taken courses to better understand his obligations as a registrant.
4. From June 23, 2020 to July 23, 2020, Kodric was registered as a dealing representative in the category of investment dealer with Foster & Associates Financial Services Inc. Kodric's registration was granted by the Investment Industry Regulatory Organization of Canada subject to terms and conditions, including that Kodric was to be placed under strict supervision and was not to engage in leverage activities, including the use of margin accounts.
5. After completing its review of the Application, Staff sent a letter to Kodric on August 13, 2021, informing him that Staff had recommended to the Director that his registration be granted subject to terms and conditions ("Terms and Conditions"), consistent with condition (a) in the 2015 Director's Decision. The Terms and Conditions, which are set out in Schedule "A", require Wealthforce to strictly supervise Kodric's trading activities, and prohibit Kodric from recommending that any client borrow money to invest in securities, or otherwise recommend a leveraging investment strategy.
6. Staff also informed Kodric that in Staff's view, he had satisfied conditions (b) and (c) in the 2015 Director's Decision.
7. Staff's letter of August 13, 2021 informed Kodric of his right to an opportunity to be heard by the Director before a decision was made regarding Staff's recommendation, in accordance with s. 31 of the Act. Kodric did not request an opportunity to be heard and accepted the Terms and Conditions on August 13, 2021. Accordingly, Kodric's registration in Ontario was reactivated effective August 16, 2021, subject to the Terms and Conditions.
August 20, 2021
Terms and Conditions for Registration of John Alojz Kodric
The registration of John Alojz Kodric (the Registrant) as a dealing representative in the category of mutual fund dealer is subject to the terms and conditions set out below. These terms and conditions were imposed by the Director pursuant to subsection 27(3) of the Securities Act (Ontario).
1. The Registrant is subject to strict supervision.
Monthly Strict Supervision Reports (in the form specified in Schedule B to CSA Staff Notice 31-349 Change to Standard Form Reports for Close Supervision and Strict Supervision Terms and Conditions) are to be completed on the Registrant's sales activities and dealings with clients. The supervision reports are to be retained by the sponsoring firm and must be made available for review upon request or as required by the Strict Supervision Report.
Prohibition on leverage
2. The Registrant may not recommend that any client borrow money to invest in securities, or otherwise recommend a leveraging investment strategy.
These terms and conditions of registration constitute Ontario securities law, and a failure by the Registrant to comply with these terms and conditions may result in further regulatory action against the Registrant, including a suspension of his registration.