Former rep banned for ‘dishonest’ conduct

A man who used false financial documents to apply for a personal line of credit has been permanently banned by the Mutual Fund Dealers Association of Canada (MFDA).

Prabhdyal Singh Rai, a former mutual funder dealing rep who was terminated by Mississauga, Ont.-based Carte Wealth Management Inc. in 2016, has also been fined $80,000 and ordered to pay $7,500 in costs.

In its decision and reasons, the MFDA said Rai applied for — and was granted — a $60,000 line of credit using false information and fabricated supporting documents, including pay stubs, bank account information and Notices of Assessment showing that his income was in excess of $140,000.

While Rai denied being personally responsible for providing any financial information and said he only signed the application form, he acknowledged that the information submitted in the application was false, and that his net worth was, in fact, zero. He ended up using $25,000 from the line of credit he was granted, the MFDA said.

“It is highly probable that the respondent was responsible, directly or indirectly, for misleading the lender into granting him the letter of credit for which he was not in any way entitled,” the MFDA wrote in its decision.

The self-regulatory organization also noted that Rai was dismissed by Carte in 2016 after the firm discovered he was involved in presenting false information in two loan applications for $200,000 for persons who had been referred to Rai by an investment broker. The information “bore a strong similarity, both in format and content, to the fabricated material used to support Mr. Rai’s own application for the letter of credit,” the MFDA wrote.

In handing down its decision, the MFDA added that Rai was uncooperative in providing MFDA staff with requested documents during its investigation.

“Completing loan applications with false information and fabricated supporting documents is fundamentally dishonest conduct,” the MFDA wrote.

“Such conduct is deceitful and is completely outside the bounds of conduct required by an Approved Person.”

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.