Notice of Hearing

Roberta Merlin McIntosh
(aka Bert McIntosh, Roberta Sims,
Roberta Butcher, and Roberta Mayer)

Section 161 of the Securities Act, RSBC 1996, c. 418

Background
1. Roberta Merlin McIntosh (McIntosh) is a B.C. resident.

2. McIntosh is a former registrant who resigned in 2003.

3. McIntosh is a former insurance licensee who was suspended for five years in 2012 because, between 2003 and 2007, she recommended high-risk illiquid securities unsuitable for her clients. Her clients, including widows and retirees, lost their entire principal investments.

McIntosh, while unregistered, advised an investor to buy specific securities
4. McIntosh met the investor in April 2011. The investor, forty-eight years old, was unable to work as the result of an automobile accident. She was reliant on disability payments and investment income. The investor had recently received a lump sum settlement. McIntosh said she would be the investor’s financial adviser.

5. On April 19, 2011, McIntosh sent the investor a letter, outlining her plan for investing the settlement funds. In her letter, McIntosh advised the investor to buy certain exempt market securities, amongst other investments. McIntosh was not registered with the Securities Commission in any capacity when she did this.

6. The investor followed McIntosh’s advice, purchasing US$111,190 and CDN$40,000 of exempt market securities.

7. McIntosh received referral fees totalling $11,732.84.

McIntosh misrepresented the securities as a prudent investment
8. The offering memoranda for the exempt market securities describe them as “highly speculative” and “a risky investment”.

9. McIntosh did not disclose this to the investor, and never provided her the offering memoranda. Instead, McIntosh described the securities as a “prudent” investment with “superior rates of return”.

McIntosh recommended securities that were unsuitable for her client
10. At the time she advised the purchase of exempt market securities, McIntosh was aware the investor was unable to work and reliant on the investment income from her lump sum settlement.

11. The offering memoranda for these securities state that an investor should purchase them “only if it is able to bear the risk of the entire loss of its investment.” In addition, these securities “should not constitute a significant portion of a Subscriber’s portfolio.”

12. The offering memoranda also state the securities will not produce any significant income for at least 4-6 years.

13. McIntosh advised the investor to allocate over one-third of her investment to these high-risk illiquid securities, which she did.

McIntosh offered to forge the investor’s signature
14. McIntosh later advised the investor to transfer money from one investment fund to another, which would require a signature authorizing the transfer.

15. Instead of mailing the transfer document to the investor and the investor mailing it back, McIntosh offered to forge the investor’s signature. McIntosh stated this was not legal, but she had done it in the past for other clients. Shortly thereafter, the investor stopped doing business with McIntosh.

Misconduct
16. By advising her client to purchase specific securities, without being registered as an adviser, McIntosh contravened section 34 of the Act.

17. By describing certain exempt market securities as a prudent investment, when she knew or ought to have known they were a highly speculative and risky investment, McIntosh contravened section 50(1)(d) of the Act.

18. By advising her client to purchase securities that were unsuitable for her, McIntosh contravened section 13.3 of National Instrument 31-103.

19. McIntosh’s conduct described in this Notice of Hearing is contrary to the public interest.

Orders Sought
20. It is in the public interest that the Commission issue orders under sections 161 and 162 of the Act.