CIRO bans three former advisors for misappropriation, conflicts, and failure to cooperate
The Canadian Investment Regulatory Organization (CIRO) has permanently banned three former dealing representatives and issued fines totalling over $2.5m following disciplinary rulings in June.
According to an Agreed Statement of Facts accepted by a CIRO hearing panel on June 2, Michael Rolland Smith misappropriated $486,626.47 from a 74-year-old client between 2017 and 2023 while working at Investors Group Financial Services Inc. in Amherst, Nova Scotia.
CIRO reported that Smith redirected funds from mutual fund redemptions and withdrawals into his own bank account using falsified banking forms and issued false account statements showing non-existent investments.
The panel also found Smith changed the designated beneficiary of the client’s mutual fund accounts to non-arm’s-length individuals without the client’s knowledge and failed to cooperate with CIRO’s investigation.
As per CIRO, Smith admitted to the misconduct and acknowledged that no repayment was made.
The panel imposed a global fine of $1,509,879.41, ordered him to pay $20,000 in costs, and issued a permanent prohibition from conducting securities-related business.
In a separate hearing held on June 11, CIRO found that Ken Lui and Devina Master, both formerly registered with CIBC Securities Inc. in Toronto, engaged in personal financial dealings with clients that created conflicts or potential conflicts of interest.
According to CIRO, the pair failed to disclose those conflicts or resolve them by exercising responsible business judgment in the best interests of the clients.
Lui was also found to have engaged in undisclosed outside business activities and both individuals failed to cooperate with CIRO’s investigation.
CIRO permanently barred Lui and Master from the securities industry and fined them $770,947.17 and $150,000 respectively.
Lui must also pay $25,000 in costs, while Master is required to pay $15,000.
As reported by CIRO, Lui and Master are no longer registered in the securities industry in any capacity.
