The registered representative did not comply with rules around crypto trading
A former registered representative has been sanctioned by the Canadian Investment Regulatory Organization after his firm became suspicious about activity in his personal bank account.
Sam Hsiao-Tse Yang was working at the Edmonton branch of RBC Dominion Securities Inc. from April 2018 to November 2021 when the contraventions of the Investment Dealer and Partially Consolidated Rules took place.
Throughout his time with the firm, he was involved in crypto trading related activities outside of his work and said he was unaware that this needed to be disclosed to RBC-DS until he was informed that this was the case in July 2019.
The firm agreed that he could continue trading but must provide them with monthly trading statements, must not solicit clients, must keep the firm informed of any changes to his activities, and must meet with them for regular review.
However, Yang was also helping a friend set up a crypto trading related business – Heartbeat Capital - but did not inform RBC-DS.
In 2021, RBC’s anti-money-laundering unit picked up large sums passing through his personal RBC bank account with more than $1 million deposited and a similar amount wired to a crypto trading firm between November 2020 and June 2021.
This triggered an investigation which discovered that Sam Hsiao-Tse Yang:
- Was selling his personal crypto holdings to friends, three of whom were
clients, to assist them in getting started with their own crypto trading
- Borrowed money from a client who is a Related Person to finance his own
personal crypto trading
- Had an ongoing business relationship with Heartbeat Capital.
Yang was terminated by RBC-DS in November 2021 and is not currently working in a in a registered capacity with a CIRO-regulated firm.
Hearing panel settlement
At a CIRO hearing panel on March 15, 2024, Yang admitted engaging in cryptocurrency trading and carrying on an ongoing business relationship with a cryptocurrency-related business, and engaging in personal financial dealings by selling his personal cryptocurrency assets to three clients and borrowing money from a client to finance his cryptocurrency trading, without the knowledge or approval of his Dealer Member.
He was fined $45,000, suspended for nine months, would face six months of close supervision upon registration with CIRO, and would have to rewrite the Conduct and Practices Handbook exam prior to registration with CIRO.
The settlement agreement is available online.
