Former dealing representative sanctioned for cheque cashing

The Mutual Fund Dealers Association of Canada (MFDA) has published its reasons for decision in the case of Liliana Teresa Marin, after the former FundEX Investments Inc. and Monarch Wealth Corporation dealing representative admitted to helping to cash cheques for a client who also made use of her tax preparation services.

Registered since 1994, Marin worked between September 2006 and November 2016 in Ontario and British Columbia for FundEX. November 2016 until March 2022 Marin worked for Monarch.

At the same time, she also operated ML Tax and Financial Services in partnership with her husband. The firm offered tax preparation services and also offered to negotiate payment arrangements on behalf of clients with the Canada Revenue Agency (CRA).

Beginning in 2005 a client, named GL in the decision documents, became Marin’s client at FundEX. When she transferred her registration to Monarch, GL then became a client of Monarch. In 2015 Marin also began providing tax preparation services to GL.

In October 2015, the CRA began garnishing money deposited to GL’s personal bank accounts to address an outstanding tax liability. GL retained Marin’s tax preparation firm to try and negotiate with the CRA.

In February 2016, GL’s bank account was closed. They did not open another until March 2019. Beginning in January 2016, Marin agreed to deposit checks payable to GL from her cleaning business, into the tax firm’s bank account. The funds were then distributed to GL in the form of cash and distributed in accordance with GL’s directions. The payments included payments to the CRA. On two occasions the funds were also used to purchase investments in GL’s Registered Retirement Savings Plan (RRSP). Between January 2016 and November 2019, Marin and her husband accepted approximately 181 checks payable to GL, totalling approximately $100,300. There is no evidence that any money was misappropriated.

The transactions came to light in February 2019 when a bank draft used to purchase mutual fund units in GL’s RRSP was stopped because the mutual fund company received a “Requirement to Pay” notice from the CRA that required the firm to pay the CRA any money it was holding for GL. Although Monarch reprimanded Marin and issued a letter to her stating that she was prohibited from accepting cheques endorsed to her from mutual fund clients again in the future, between July 2019 and November 2019 she accepted at least seven additional cheques.

Following its investigation, Monarch imposed a number of disciplinary measures including a requirement to complete training, including anti-money laundering coursework, a 60-day suspension, commission deductions, a requirement to submit to six months of close supervision, and also to pay $1,000 per month during that period to cover the firm’s costs of heightened supervision. Marin resigned from Monarch in March 2022.

The MFDA’s sanctions include a prohibition from conducting securities related business in any capacity for any MFDA member firm for one year, a $10,000 fine, and costs totalling $7,500.