Investment representative faces sanctions for deceptive behavior

Investment representative faces sanctions for deceptive behavior

Investment representative faces sanctions for deceptive behavior An enforcement notice from the IIROC announced its finding that investment representative Roland Papp was guilty of deceptive misconduct.

According to the notice, Papp was found to maintain multiple brokerage accounts outside his employer firm RBCDS, which the firm expressly forbids without its knowledge or approval. Papp opened two accounts at Interactive Brokers Canada Inc., and one at Questrade Inc. Whenever he opened an outside account, he did not declare his status as a registrant in the securities industry.

At no time did Papp declare the existence of the accounts to his employer, and he even denied having any such outside accounts when filling out an employee questionnaire. Though Papp claimed he verbally informed his branch manager David Hawkey of the existence of these accounts, Hawkey did not remember such a conversation, insisting that he would have required Papp to obtain the appropriate permissions upon learning of the accounts.

Papp was also found guilty of making numerous other misrepresentations. In 2014, he placed a total of $136,300 into his RBC personal account, depositing it in $9,000 tranches in several branches so as to avoid a $10,000 minimum threshold that would trigger scrutiny under money laundering regulations. When RBC and, later on, the IIROC, asked him about the money, Papp offered several conflicting explanations: that the money belonged to his mother in law; that it came from various gifts, savings funds, and sale/rental transactions; and that it was from his wife.

In an attempt to justify his behavior, Papp pointed out that “there was no abuse of the public’s trust, no abuse of any client money or any of their funds. These restricted personal accounts that I was not even able to have that my employer, as RBCDS does not offer online futures trading, nor does it offer competitive commissions,” according to a copy of the IIROC decision and reasons pertaining to the matter.

Sanctions against Papp are to be decided at a future hearing.

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