The duo is fined and permanently banned after failing to disclose conflicts or attend hearings
The Canadian Investment Regulatory Organization (CIRO) said clients and one individual gave Ken Kin Kit Lui at least $957,000, with more than $470,000 still unaccounted for.
Following a disciplinary hearing on June 11, CIRO issued its reasons for decision on July 24, permanently banning Lui and Devina Master from conducting securities-related business with any Dealer Member and imposing substantial financial penalties and cost orders on both.
The CIRO hearing panel found that Lui and Master, formerly registered with the Toronto branch of CIBC Securities Inc., engaged in personal financial dealings with clients that created conflicts or potential conflicts of interest.
These conflicts were not disclosed to the Dealer Member, nor were they addressed using responsible business judgement focused on the clients’ best interests.
The misconduct involved at least two clients and one individual and occurred over a prolonged period from 2018 through 2020.
Lui also engaged in outside activities without the knowledge or approval of the Dealer Member.
In June 2015, Lui and another individual established Clearwest Capital as a general partnership involved in buying and reselling properties.
The Dealer Member had policies requiring prior approval for such outside activities, along with a Code of Conduct mandating annual confirmation of compliance.
Lui never disclosed his involvement in Clearwest and attested each year that he had no such activity.
The panel found that between 2018 and 2020, clients SK and CM and individual EM invested in or loaned funds to Clearwest or Lui, totalling approximately $957,000.
Of that amount, $470,947.17 received from client SK remains unaccounted for. While partial repayments were made, many of them were processed through a joint account held by Lui and Master.
Master confirmed her role in facilitating several transactions, including 27 transfers totalling about $228,500 to client SK and processing a $57,000 transfer from client CM to Lui.
Lui and Master failed to cooperate with CIRO’s investigation into their conduct.
Despite numerous attempts by CIRO Staff between March 2023 and February 2024—including personal service, email, and registered mail—both individuals failed to attend scheduled interviews or respond to requests.
The hearing panel said this lack of cooperation prevented Staff from determining the full scope of the misconduct, including all client funds involved, the roles of each respondent, and whether additional clients were affected.
As a result of the misconduct, Lui was fined $770,947, which included the unreturned client funds, a $225,000 fine for personal financial dealings and undisclosed outside activity, and $75,000 for failing to cooperate with the investigation.
He was also ordered to pay $25,000 in costs. Master was fined $150,000, with $75,000 relating to her role in the financial dealings and another $75,000 for her failure to cooperate.
She was ordered to pay $15,000 in costs. Both received permanent prohibitions from conducting securities-related business in any capacity while associated with a CIRO Dealer Member.
Lui resigned from the Dealer Member in March 2020. Master’s employment was terminated in February 2023.
Neither individual is currently registered in the securities industry.
