Winnipegger fined after taking $80K to invest, despite not being licensed

A Winnipeg businessman has been ordered to pay $2,000 in a settlement with theManitoba Securities Commission after being accused of trading securities without registration.

In 2014, Dennis Malthouseaccepted $80,000 from a casual acquaintanceafter mentioning he had been managing money for his sister and doing well, according to a report on the decision, released Tuesday by the commission.

On Jan. 18, the acquaintance wrotea $50,000 bank draft, at Malthouse's direction, payable to Malthouse AutoLtd. The friend was under the impression the money would be invested in mortgages and loans.

A second cheque for $10,000 was written in early February.

On Feb. 20, Malthouse gave the acquaintance a cheque for $416, with a note on it saying it was interest earned on the first $50,000, at a rate of 10 per centperyear.

The person then cut a third cheque a few days later for another $20,000.

In total, through the year, Malthouse paid the person $9,333, the commission report says, but nothing more was paid after that, leading to a complaint being made to the commission by the acquaintance, along withaclaim for compensation for financial losses.

In January 2023, the commission gave notice of its intent to hold a hearing in February. The hearing was twice delayed before Malthouse's lawyers and the commission reached an agreement in late March.

In the meantime, Malthouse separately reached a financial settlement with the acquaintance, the report says, sothe claim for financial compensation was withdrawn by the commission.

Malthouseadmitted to trading in securities without being registered to do soand was co-operative during the investigation, the report says. He was ordered to pay the commission $2,000 for costs related to the investigation and hearing.

"The settlement avoids the time and costs associated with a contested hearing process.In addition, the settlement agreement itself becomes public so can serve as a general deterrence for others in the industry for future improper conduct," the report says.