She signed a client's name, moved $118,000 through hidden accounts and kept less than $2,000
A former BMO Investments dealing representative who kept a departed client's bank account open and used it to move money out of two deceased clients' estates has been permanently barred from the securities industry.
A Pacific District hearing panel of the Canadian Investment Regulatory Organization (CIRO) ordered Christina (Lorna) Cole to disgorge $1,801.78, pay a $50,000 fine and cover $7,500 in costs, according to reasons released on July 15.
Cole, who admitted the misconduct in an agreed statement of facts, misappropriated or failed to account for client monies between October and December 2023, contrary to Mutual Fund Dealer Rule 2.1.1.
Cole was registered with BMO Investments Inc. in British Columbia from November 2020 and worked out of a branch in the Squamish area.
She is no longer registered in any capacity.
The scheme began, the agreed facts stated, when a client identified as AS moved overseas in October 2023 and asked the affiliated bank to close her accounts.
Cole, assigned to handle the closure, left one account open.
Around October 24 she prepared a form for a replacement debit card tied to that account, signed AS's signature without her knowledge and submitted it for processing.
Cole then turned to the estate of a client, WA, who had died on October 10.
Ahead of meeting the client's daughter and executor, she cashed a $24,258.84 guaranteed investment certificate (GIC).
She funnelled the money through a branch suspense account and a cash general ledger account into the AS account, then drew a bank draft to herself for $25,791.83.
She deposited the draft into her own credit union account and spent roughly $3,000 on personal expenses and debts.
A third client, RB, was the successor holder of a tax-free savings account (TFSA) left by his late spouse, LB.
When RB instructed Cole in November to redeem the account and transfer the proceeds to his bank account, she instead moved the full $94,471.91 into the suspense account.
In December she diverted $1,000 of that sum into the AS account and withdrew it in cash using the replacement debit card.
The bank uncovered the draft purchase on November 24, 2023, suspended Cole on December 14 and terminated her employment on January 9, 2024.
She misappropriated $24,801.78 in total.
The bank and dealer later compensated the affected clients and recovered $23,000 from Cole's credit union account, leaving her with a retained benefit of $1,801.78.
CIRO said the compensation paid to clients was not a mitigating factor for Cole.
Enforcement counsel described the conduct as egregious, submitting that misappropriation strikes at the heart of the advisor-client relationship and damages the integrity of the securities industry.
The panel agreed, noting that the misconduct was not isolated but formed a pattern that involved three clients, two of them estates.
Cole told the panel she could not afford the penalties, citing a 40-hour work week at slightly above minimum wage, an out-of-work husband and an ongoing Consumer Proposal to deal with her debts.
In a written statement she said: "I deeply regret my actions, I will carry that guilt and shame for the rest of my life."
She added that she was "scared, stupid, and despite [desperate]. I can not and do not excuse my actions."
The panel gave that argument little weight, finding that Cole had not supplied enough evidence to meet her burden of showing an inability to pay and that the egregious nature of the misconduct outweighed the point.
The panel also observed that Cole had received tax refunds of more than $12,000 in the years after the misappropriation, yet had not repaid the $1,801.78 she retained.
The panel said the fine sat at the bottom of the appropriate range.
The amount Cole actually diverted was arguably $118,273.69 once the full TFSA balance she moved into the suspense account was counted, since only the dealer's intervention stopped the rest from being taken.
