MFDA bans, fines former branch manager $250K for referral arrangements

By Staff | October 23, 2018 | Last updated on October 23, 2018
1 min read

The MFDA has banned and fined a former branch manager $250,000 for his referral arrangements, outside activities and not cooperating with the investigation.

Hong Lam worked as a representative and branch manager with Investia Financial Services Inc. in Richmond Hill, Ont. from 2006 to 2016. He was also a licensed insurance agent and mortgage broker.

The MFDA alleges Lam had referral arrangements with three real estate and development companies that offered investments including syndicated or pooled mortgages.

Lam allegedly referred 24 clients and three other people to make investments outside Investia’s accounts and facilities and without the firm’s knowledge or approval, the MFDA’s decision and reasons document said. The investments totalled more than $2 million.

Three other approved persons at Investia referred clients to make these investments through Lam, the MFDA said. Lam allegedly obtained referral fees from the companies that he paid to the approved persons.

Lam is also alleged to have not disclosed his other “gainful occupation” operating a company to accept the referral fees.

Lam failed to cooperate and misled the MFDA, the panel said, preventing staff “from determining the full nature and extent of his activities.” The MFDA said it doesn’t know the exact number of people involved in the outside activities, nor the extent to which Lam profited.

Lam resigned from Investia in 2016 and isn’t currently registered in the securities business.

In addition to the $250,000 fine and permanent ban, he was also ordered to pay costs of $10,000.

Read the decision and reasons here.

Advisor.ca staff

Staff

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