Police officer turned pastor breached Alberta securities laws, commission says

A retired Edmonton city police officer who used to train members in high speed pursuits before becoming a Pentecostal church pastor has been found liable by the Alberta Securities Commission (ASC) for breaching securities laws.

The ASC on Friday issued a decision in the case of Kenton Roy

Rustulka, finding him liable for breaches of his “know your client” (KYC) and suitability obligations, and for making material misrepresentations to his clients — many of whom were seniors or near retirement — regarding general and specific risks associated with exempt market securities.

From Jan. 1, 2013, to June 3, 2016, while employed with Wealthterra

Capital Management Inc. as an exempt market dealing representative, Rustulka sold approximately $6,500,000 in exempt market securities offered through Wealthterra, and earned approximately $460,000 in associated commissions, the ASC said in a Friday update on the case.

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 overestimating and overemphasizing 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.