CIRO found the advisor conducted unauthorized discretionary trades
A former registered representative with RBC Dominion Securities Inc. has been sanctioned and suspended for six months after admitting to engaging in widespread discretionary trading that resulted in millions in client losses.
The Canadian Investment Regulatory Organization (CIRO) announced Friday that a hearing panel accepted a settlement agreement with Hongjia Liu on June 18, 2025. The agreement followed allegations that Liu conducted unauthorized discretionary trading in 23 client futures accounts between June 2017 and December 2019 while working at RBC Dominion Securities’ downtown Vancouver branch.
Under the settlement terms, Liu agreed to pay a $75,000 fine, disgorgement of $225,000, and costs of $15,000. The six-month suspension prevents Liu from acting in any registered capacity within the securities industry.
Clients faced millions in losses
According to the settlement agreement, Liu “engaged in widespread discretionary trading across a significant portion of his futures book of business” involving “large volumes of high-risk trading, routinely exposing clients to significant potential losses.”
The conduct involved approximately 15,219 orders entered without obtaining approval for trade specifics in advance. Liu employed what the agreement described as a “one size-fits-all” approach using high-volume, high-risk trading strategies similar to day trading.
Most affected clients were high net-worth individuals with ties to China who had significant investing experience. All but one of the 23 clients suffered losses totaling $8,722,250, including commissions, with individual losses ranging from 15% to 94% of their futures account holdings.
While clients suffered substantial losses, Liu’s trading generated approximately $4,789,476 in gross commissions during the relevant period. Liu’s net payout was 50%, or approximately $2,394,738, representing about 64% of revenue from his entire futures book of business. In 2018, Liu’s commissions were more than double the next highest producing futures advisor at RBC Dominion Securities.
RBC termination followed internal investigation and complaints
Liu was terminated from RBC Dominion Securities in September 2020 and is currently not registered in the securities industry in any capacity.
The trading strategy involved writing naked futures contracts across various commodities including energy, precious metals, and soft commodities such as soybeans, sugar, cotton, and coffee. This high-risk approach provided unlimited loss potential while generating maximum profits limited to premiums received.
Liu’s conduct violated RBC Dominion Securities policies, which prohibited discretionary trading in futures accounts. Between October 2017 and March 2018, Liu received queries from supervisors regarding discretionary trading and trade ticket deficiencies but assured them he was following company policies and contacting clients about trade details.
The misconduct came to light after a client formally complained that Liu had been investing her money in speculative futures contracts without her knowledge or authorization. Two additional complaints followed, prompting an internal investigation by RBC Dominion Securities.
The settlement agreement notes that Liu self-reported his conduct to CIRO and had previously paid $75,000 toward settlement of complaints for two clients. The hearing panel accepted the agreement, which was signed May 21, 2025.
