Settlement also comes with $45,000 in financial penalties
The Canadian Investment Regulatory Organization (CIRO) has permanently barred former dealing representative Gaurav (Gavin) Banerjee from conducting securities-related business after he admitted to borrowing money from a client.
In a notice issued Tuesday, CIRO said a hearing panel accepted a settlement agreement reached between enforcement staff and Banerjee on April 30. The sanctions include a permanent prohibition from working for or being associated with any CIRO dealer member, a fine of $8,500, disgorgement of $31,500, and costs of $5,000.
According to the settlement agreement, Banerjee was registered as a dealing representative with Scotia Securities Inc. in British Columbia between September 2021 and July 2024. He previously worked with CIBC Securities Inc. from February 2019 to June 2021.
CIRO said the misconduct occurred while Banerjee was servicing clients in the Victoria, B.C., area. At the time, the regulator said, the dealer member’s policies prohibited approved persons from entering into personal borrowing or lending arrangements with clients and required them to disclose conflicts of interest.
The settlement agreement stated that on July 19, 2024, Banerjee borrowed $35,000 from a client identified only as client X. The client issued a cheque through a bank affiliated with the dealer member, and the funds were deposited into Banerjee’s personal account.
The agreement said Banerjee and the client signed a loan agreement that called for monthly repayments beginning Aug. 31, 2024, with the balance due by July 31, 2025. No interest was included in the agreement, although Banerjee verbally agreed to make monthly payments of $1,500. The borrowed funds were used for personal expenses and debts.
CIRO said the arrangement came to light after the affiliated bank received a cheque verification request from Banerjee’s bank on July 23, 2024. Branch personnel contacted the client, who disclosed the loan arrangement. Banerjee was suspended on July 25, 2024, and resigned four days later during the firm’s investigation.
The regulator said the client held substantial assets with both the dealer member and the affiliated bank, and Banerjee was aware of this when he requested the loan.
CIRO said the client did not file a complaint and had received about $3,500 in repayments as of August 2024. Banerjee had not previously been subject to disciplinary proceedings by CIRO or the former Mutual Fund Dealers Association.
