Advisors welcome sanctions against Costello

(May 2, 2003) The Ontario Securities Commission’s (OSC) decision to impose stiff sanctions against popular financial commentator Brian Costello received some votes of support this week in Advisor.ca’s online discussion forum, the Talvest Town Hall.

On Wednesday, April 30, the OSC reprimanded Costello, ordered him to pay $300,000 in costs, and ruled that his business activities over the past six months would be reviewed, a move that could lead to more sanctions.

“It’s about time the industry started cleaning up some of these gurus,” wrote Tom Manion in the online forum. “It makes the industry look bad when these guys don’t get nailed.”

The commission said that Costello “did not disclose information that he should have disclosed concerning his conflicts of interest,” and dismissed the argument that Costello was providing investment education, not advice.

Ian Robertson, who attended one of Costello’s seminars, says he’s pleased with the sanctions. “Just to see the smoke and mirrors routine made me sick,” he wrote.

Costello will also be banned for five years from claiming an exemption under Ontario securities laws that allows financial journalists to express opinions without being registered as advisors.

Despite the severity of the sanctions, one Town Hall participant felt the commission didn’t go far enough. “Costello was equally guilty of acting in furtherance of a trade, and yet was not charged,” said Robert Kyle. “Proof lies with the unfortunate clients who lost their investment. Why was Costello not charged when the evidence is overwhelming?”

Join the Costello debate or start a new discussion in the “Free For All” forum of the Talvest Town Hall on Advisor.ca.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca