WFG Securities advisor filled in DSC fee disclosures only after his client had already signed
A British Columbia mutual fund representative who left a grieving widow's home-buying timeline out of her file, then quietly filled in fee disclosures after she had already signed, will pay $25,000 to settle with the regulator.
On May 21, a hearing panel of the Canadian Investment Regulatory Organization (CIRO) accepted a settlement agreement, with sanctions, between Enforcement Staff and Sanjeev Kumar Tejpal.
Tejpal agreed to pay a $20,000 fine and $5,000 in costs, and admitted that in March 2021 he failed to ensure that mutual fund purchases subject to a deferred sales charge (DSC) schedule, which he recommended to and processed for a client, were suitable for the client.
The client, identified as LV, had received approximately $450,000 from her late spouse's life insurance policy after he passed away in January 2021.
She met Tejpal that March to discuss investing the proceeds, telling him she rented her house, was not working because of an injury, and relied on insurance benefits as her only income.
She said she intended to purchase a home within three years or, according to Tejpal, three to five years, and wanted to allocate some of the money towards retirement savings.
Tejpal opened a non-registered account on March 22, 2021 and recorded her investment time horizon as "10 + years" on the New Account Application Form.
The settlement agreement states that figure was inaccurate given her stated plan to buy a home within three to five years, and that Tejpal ought to have ensured the recorded time horizon reflected all of her objectives.
That same day, Tejpal recommended and processed the purchase of mutual funds totaling $390,000, subject to a six-year DSC schedule.
The Dealer Member's own policies stated that clients buying funds on a DSC basis should have a seven-year-plus time horizon, and that such funds would generally not be appropriate where a client's time horizon was shorter than the DSC schedule.
The agreement says Tejpal recommended the funds despite client LV's shorter actual time horizon, and without disclosing the DSC schedule to her.
The purchase paperwork drew particular scrutiny.
When Tejpal provided the trade ticket for client LV's signature, the section setting out the DSC fee percentages was blank.
After she signed and returned it, he completed that section and submitted it.
When the Dealer Member reversed the purchase because the amount was not clearly specified, Tejpal inputted the figure on the version client LV had already signed and asked her to initial it before resubmitting.
In or about March 2022, client LV told Tejpal she had bought a condo and asked him to redeem $300,000 toward a down payment.
He processed the redemption without disclosing the DSC fees.
The Redemption Trade Ticket's fee section was again blank when client LV signed it; afterward, Tejpal completed it and wrote "client is aware of DSC charges app[roximately] $15,000."
The agreement states client LV was not aware of those charges, because Tejpal had never disclosed that the funds carried a DSC schedule or that redemption would trigger fees.
On March 24, 2022, the $300,000 (gross) redemption was processed.
After DSC fees of $17,717.03, client LV received net proceeds of $282,282.97.
In September 2023, she transferred out the remaining $74,149.03 to another institution, incurring a further $3,664.88 in DSC fees; Tejpal was not involved in that transfer.
Tejpal earned $10,904.27 in compensation from client LV's purchases.
After she complained in May 2024, the Dealer Member paid her $21,381.91, covering both rounds of DSC fees, and deducted that amount plus a $1,000 administrative penalty from Tejpal's commissions.
The firm suspended him internally on August 13, 2024, then lifted the suspension on February 20, 2025 and placed him on increased supervision, where he remains as of the date of the agreement.
Tejpal has been registered in British Columbia as a dealing representative for WFG Securities Inc., a Dealer Member of CIRO (formerly a Member of the MFDA), since February 2008, and worked in the Surrey area.
He has no prior disciplinary history with CIRO or the MFDA.
