A B.C. advisor has been fined $10,000 for failing to comply with anti-money laundering legislation.
On July 12, 2012, a hearing panel of the Investment Industry Regulatory Organization of Canada (IIROC) accepted a settlement agreement, with sanctions, between IIROC staff and Maoqing Teng.
Teng admitted he failed to perform his gatekeeper obligations. Contrary to anti-money laundering legislation, he stated on account documents that he had met two clients when he had not; and accepted trading instructions for clients from a third party and another client without the existence of duly-executed trading authorizations.
Specifically, Teng admitted to the following violations:
a) During the approximate period from March to July 2008, he failed to properly perform his role as a gatekeeper to the capital markets in respect of four client accounts by:
(i) failing to ensure that he learned the essential facts with respect to the opening of the accounts; and
(ii) failing to make diligent inquiries about certain transactions in circumstances that were peculiar, suspicious or appeared to be consistent with improper market related activity; thereby violating IDA Regulation 1300.1(a) and By-law 29.1.
b) In April 2008, for the purpose of the requirements of Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, he represented on the account documents of two clients that he had met those clients when in fact he had not, contrary to By-law 29.1.
c) From April 2008 to July 2008 inclusive, he accepted instructions from a third party without obtaining a duly-executed trading authorization, contrary to Dealer Member Rule 200.1(i)(3) (then Regulation 200.1(i)(a)).
d) In May 2008, he accepted instructions from another client without the existence of a duly-executed trading authorization, contrary to Regulation 200.1(i)(a).
Pursuant to the settlement agreement, Teng:
a) Shall not be permitted to re-apply for registration in any capacity for one year;
b) Must pay a $10,000 fine; and
c) Must successfully re-write the examination based on the Conduct and Practices Handbook course, as a condition of re-registration.
Teng also agreed to pay costs in the amount of $5,000.