Just days after the Mutual Fund Dealers Association
(MFDA) reported a surge in enforcement proceedings due to signature-related offences, former bank employees and investors have come forward with stories involving falsified signatures and documents.
“It was easily 85% of the back sales team doing it,” an unnamed former financial services representative at CIBC told CBC News. She was referring to the last branch she worked at, but added that it happened in other branches as well. She also claimed she was asked to forge customer’s initials, making it seem like they’d asked for insurance on credit card and loan applications.
Meanwhile, a former financial advisor at TD bank reported that he frequently saw his manager using signature cards that were on file to copy clients’ signatures onto documents. He also claimed to have been taught how to scribble over dates on people’s credit checks then black the scribbles out with thick felt pen to conceal the fact that he pulled an Equifax report without a customer’s knowledge.
Both CIBC and TD issued statements saying that they take such allegations very seriously, and such behaviour would warrant disciplinary actions that include termination.
Despite the increasing number of financial professionals being found guilty of signature falsification, few have served time in prison or paid significant fines, reported CBC News. “[Y]ou could count on the fingers of one hand the people who have been charged criminally or sent to jail [for forgery],” SIPA President Stan Buell told the news outlet.
Harold Blanes, a 97-year-old Kelowna man, shared his own story. Ten years ago, he asked a financial consultant to place $400,000 of retirement savings into GICs. The consultant reportedly ignored a box he ticked and initialled to indicate he only wanted to invest his savings for a short time.
He found the box next to it marked with a squiggly line — supposedly a set of initials — which empowered the consultant to invest the money for six years. The money went into mutual funds that sank during the market crash in 2008. Blanes got his initial investment back after a years-long legal battle, but lost an estimated $136,000 in compound interest.
The MFDA has categorized most of the signature falsification cases it tallied in 2016 as done mainly for convenience — an assessment questioned by Ottawa-based lawyer Harold Geller.
“The MFDA is a conflicted regulator. They are run by dealers and it's not in the dealer's interest to look into this issue,” he told CBC News. He said settlements can take two to five years, with investors often getting forced into confidentiality.
SIPA has released a report saying that Canadians are losing “billions of dollars” to systemic fraud and wrongdoing by the regulated investment industry. Buell said the group wants a government inquiry.
“And they have to talk to the victims — not just the industry and regulators, and people who've done studies,” he said.
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