The New Self-Regulatory Organization of Canada (New SRO) has sanctioned Sungsoo (Steve) Lee, a former BMO Investments Inc. dealing representative, permanently banning Lee from conducting securities related business and fining him $35,000 plus costs.
In the settlement agreement reached with the New SRO, Lee admits that he ignored repeated requests for an interview between July 2020 and February 2022 after his firm terminated his registration in December 2018 and reported allegations to the Mutual Fund Dealers Association of Canada (MFDA) in January 2019. Lee is no longer registered in the securities industry in any capacity.
While the regulator investigated allegations that Lee instructed other approved persons to open client accounts and complete paperwork for clients without obtaining information directly from clients, along with allegations that he provided pre-signed forms to other approved persons and likely failed to comply with other regulatory requirements and policies, Lee is only being sanctioned for not cooperating with the investigation.
Registered with BMO from 2002 until 2018, once terminated, Lee told investigators that his first language wasn’t English and that he would require the interview to take place in his first language. (The regulator secured the services of an interpreter.) His legal counsel then advised investigators that Lee would not attend the interview but would respond to questions in writing. Later, it was said that he was unable to attend for medical reasons. When he provided a doctor’s note simply stating that Lee would be off work for medical reasons on the day of the interview, the covering letter from counsel indicated that the medical condition was private and that Lee was not obligated to disclose details.
“The respondent did not identify any accommodations which would facilitate his participation in the interview, other than the need for a language interpreter, which staff said it would provide,” the settlement agreement states. “As a result of the respondent’s failure to cooperate with staff’s investigation, staff had been unable to determine the full nature and extent of the conduct under investigation.”
Lee later told the MFDA, now the New SRO, that he relied on legal advisors who did not accurately explain his obligation to cooperate or the potential consequences of not attending an interview. He also acknowledged that his medical condition did not preclude him from attending an interview.
In addition to the $35,000 penalty and permanent ban from conducting business with a regulated member firm, the New SRO also ordered Lee to pay costs in the amount of $5,000.