Former mutual fund advisor's violation 'strikes at the heart of the advisor-client relationship,' says MFDA
The Mutual Fund Dealers Association of Canada (MFDA) has permanently prohibited a dealing representative who fraudulently took $30,000 from a student and used it for his own purposes.
In its decisions document, the MFDA said Adeleke Rasaq Olanrewaju was registered as a dealing representative with CIBC Securities in British Columbia.
In or about 2018, Olanrewaju was attending a church when he approached a foreign student, offering to assist him with his finances and investments. Olanrewaju told the student, who was studying at the University of British Columbia and receiving a stipend of $20,000 a year, that he could facilitate the purchase of an investment that could return approximately 3% or $600 per month.
On or about August 13 that year, the client gave him a bank draft in the amount of $30,000, made payable to the CIBC and to Olanrewaju. There were no documents filled out or filed in relation to the investment.
The following day, Olanrewaju deposited the bank draft into his personal bank account, which at the time had a $98 overdraft. The day after, he used $19,945.43 of the deposit for his own personal expenses and investments.
By the end of August, only $1,458.44 was left in the account; by the end of October, Olanrewaju had depleted it. He paid the client only twice on October 1st and November 1st, in the amounts of $679.24 and $678.11, respectively.
“Contrary to the representations made by the Respondent to the Client none of the $30,000 given to the Respondent was invested with the Member on behalf of the Client,” the MFDA said.
On February 1, 2019, the student submitted a complaint to CIBC Securities about the transaction, saying he had not received any documentation from Olanrewaju, prompting an investigation by the firm.
When the firm interviewed him about the complaint on February 13, he made several false statements, according to an affidavit from an individual named Indira Nadarajan. He said he did not receive money from the client, the bank draft was made out only to him, and he gave the bank draft to the client’s financial advisor to deposit, and the money from the bank draft was sent to Nigeria.
He was terminated that same day.
That April, staff from the MFDA launched an investigation into the matter. They asked Olanrewaju to respond to the charges that he’d used the $30,000 instead of investing it for the client, but he did not cooperate.
According to a sworn affidavit submitted by an individual named Indira Nadarajan, which detailed conclusions drawn from answers and documents provided by CIBC Securities, the client got back $21,819.95, of which $19,110 was repaid on February 4, three days after the client complained. CIBC Securities compensated the client for remaining amount due.
“The misappropriation of client monies is dishonest and strikes at the heart of the advisor-client relationship,” the MFDA said. “It not only causes harm to the client and the Member, but it also undermines the reputation and integrity of the securities industry as a whole.”
The MFDA also fined Olanrewaju $85,000, and ordered sanctions of $10,000.
