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Rustulka was found to have reported false and misleading information on KYC forms and to have failed to properly identify his clients’ investment needs, objectives, financial circumstances and risk tolerances.
Rustulka’s clients were induced to invest in exempt market securities based on these representations, and because they believed he was “trustworthy and honest, based on his previous employment as an Edmonton police officer and as a senior pastor,” said the ASC.
In its decision, the panel noted that the majority of the allegations in the Notice of Hearing were proven and that Rustulka “recommended securities purchases and investment strategies that were patently unsuitable for (the clients). He further exacerbated the situation by making misrepresentations with respect to risk while over-estimating and over-emphasizing the potential upside.”
A hearing management session will be held on June 25 to set a date for submissions with respect to sanctions. Following that, it will be determined what, if any, sanction or cost-recovery orders will be made against Rustulka.
The ASC is the regulatory agency responsible for administering the province’s securities laws. It is entrusted to foster a fair and efficient capital market in Alberta and to protect investors.
