Dealing representative made over 1,000 unauthorized changes to protect her job, says CIRO
The Canadian Investment Regulatory Organization (CIRO) has imposed an 18-month ban on an advisor who made over a thousand unauthorized changes within an email database used to collect survey feedback from clients.
According to a settlement agreement dated December 6, 2022, Megha Arora was registered as a dealing representative with Royal Mutual Funds Inc. in Manitoba from June 15, 2015 to July 23, 2020, when she resigned from the firm.
Between November 2018 and July 2020, she received variable compensation based on a client loyalty metric derived from client satisfaction surveys. RMFI would email surveys to a random sample of clients and use the results as a supervisory and training control measure.
“Survey results of a certain value reduced the Client Loyalty Metric for [Arora’s] business location and may have required an Approved Person to attend additional training,” the agreement said.
At the time, advisors registered with RMFI were able to access a system RMFI used to collect client information. Arora accessed the system to make 1,161 unauthorized changes to contact information in the system.
Those changes included:
- 153 instances of editing or deleting a client’s email address in the system;
- 773 instances of marking a client’s email address as “invalid”; and
- 235 instances of selecting “do not survey” for a client
RMFI’s policies prohibited advisors from taking any of those actions without a client’s consent.
According to the agreement, Arora’s behaviour impacted 52 clients with investment accounts at RMFI. None of the changes she made prevented the clients from accessing their investment accounts.
While she made the unauthorized changes to prevent clients from receiving a survey, Arora denied that she wanted to increase her variable compensation based on the client loyalty metric claiming instead that she wanted to “avoid receiving scores … that would negatively reflect on her job.
“[Arora] states that she is the sole earner for her family, and also supports her parents,” the agreement said, noting Arora’s mother has “a serious medical illness” that prevents her from working. “[Arora’s] income is less than the expenses she pays for her family and parents.”
There’s no sign that clients suffered financial losses due to Arora’s misconduct.
Aside from the ban, she’s agreed to pay a $5,000 fine and $5,000 in costs, and is required to complete an ethics or professional conducts course before being allowed to re-register in the industry.
