A former fund rep has been fined and banned after a Mutual Fund Dealers Association of Canada (MFDA) hearing panel found that she misappropriated money from clients and sold unauthorized syndicated mortgage investments (SMIs).
The former rep with Keybase Financial Group Inc. in Richmond Hill, Ont., Rebecca Wai-Chiu Li, was fined $850,000 and permanently banned by an MFDA hearing panel, which ruled that she violated a number of MFDA rules. Li was also ordered to pay $20,000 in costs.
According to the hearing panel decision, Li violated MFDA rules by conducting unauthorized securities business and unapproved outside business activity by dealing in SMIs. She also engaged in improper personal financial dealings with clients and failed to cooperate with the self-regulatory organization’s (SRO) investigators.
Among other things, the panel found that Li sold at least $2.2 million in syndicated mortgages to clients, generating $173,500 in fees from the unauthorized activity. The clients’ money was largely lost, the MFDA said.
The panel also concluded that Li obtained and used powers of attorney (POAs) from several clients to engage in SMI transactions and, as a result, she took at least $480,000 from clients and others.
Li did not participate in the hearing. The panel said that she initially misled MFDA investigators before she ultimately stopped cooperating with the SRO.
“The respondent’s misconduct was egregious. A permanent prohibition is necessary to protect the public from future misconduct by her in the securities business,” the panel said in its reasons.
“A significant fine is required to provide an adequate deterrent for her and for others who may be inclined to disregard the rules cited in the allegations,” the MFDA added.