CIRO says firm failed to act on red flags as offshore entity control shifted without disclosure
The Canadian Investment Regulatory Organization (CIRO) has accepted a settlement agreement with Gary Edmond Perron and Cumberland Private Wealth Management (CPWM).
The decision followed a settlement hearing held on March 21, with written reasons issued on April 28.
According to the decision, Perron failed to disclose and seek pre-approval for activities related to the transfer of shares and control of offshore entity Keynard Limited to himself.
CPWM, meanwhile, failed to adequately respond to red flags concerning the Keynard account and continued to permit trading activity.
Perron agreed to a fine of $200,000 and costs of $50,000. CPWM agreed to pay a fine of $150,000.
The sanctions were part of a joint settlement presented to the hearing panel, which determined that the penalties fell within a reasonable range of appropriateness under CIRO rules.
The settlement outlines that Perron, a Chartered Financial Analyst residing in the Bahamas since 2018, conducted business at CPWM while failing to disclose ownership interests in Keynard.
Between 2020 and 2021, Perron used another offshore entity, Akala Ltd., to acquire Keynard’s shares from the Silene Foundation. He did not report this activity in compliance attestations or seek prior approval as required under Dealer Member Rule 18.14.
CIRO documents show that CPWM had been servicing a client account for Butterfield Trust, a Bermuda-based entity with links to Keynard.
Between January 2020 and May 2021, this account ranged in value between approximately $133m and $152m.
Keynard was also the sole unitholder of the Nebulae Fund, managed by NCM Asset Management Ltd., which Perron founded.
CPWM suspended Perron in April 2021 after becoming aware of his interest in Keynard.
As a condition of reinstatement, Perron was required to acknowledge his beneficial ownership of Keynard and cease direction over related accounts.
However, the panel noted he continued to direct trades in the Keynard account.
The panel found that CPWM failed to address multiple red flags, including complex offshore structures involving Keynard (Belize), Akala (Bahamas), the Silene Foundation (Curacao), and Butterfield Trust (Bahamas).
CPWM had previously declined to open an account for KT, Perron’s associate and former Keynard director, due to anti-money laundering compliance issues.
Despite identifying issues in March 2021 and self-reporting to CIRO, the firm allowed Perron to continue trading in the Keynard account.
Supporting documents provided in late 2024 and early 2025 did not clearly establish whether the Silene Foundation was the true beneficiary, as Perron claimed.
The panel emphasized that it is not tasked with deciding whether it would impose the same sanctions as negotiated but instead assesses whether the penalties fall within a reasonable range and serve the public interest.
It cited previous decisions such as Callaway (Re), Malic (Re), and Stevenson (Re) as comparable cases.
The panel accepted mitigating factors, including the parties' cooperation and CPWM’s internal investigation, which was shared with CIRO.
It concluded that the settlement terms were fair and reasonable, given the facts and context.
Perron continues to act as a Registered Representative with CPWM, which is a CIRO-regulated Dealer Member based in Toronto.
