Former rep fined $140,000

A hearing panel of the Mutual Fund Dealers Association of Canada has fined Ramnarine Ramgolam, a former CIBC Securities Inc. dealing representative and approved person, $140,000 plus costs in the amount of $10,000.

The MFDA has also permanently banned Ramgolam from conducting securities-related business with any MFDA member firm after the representative admitted to misappropriating at least $116,084 from one CIBC Securities client and 12 more CIBC clients between June 2017 and June 2018.

Ramgolam also admitted to borrowing $50,000 from another client during that time, funds that were provided from the client’s personal line of credit, without paying interest or making full repayment according to the terms of the loan.

Working at the time as an approved person, but also as a bank employee, Ramgolam was terminated by CIBC in July 2018 after it was discovered that he opened two bank accounts in his cousin’s name, without his cousin’s knowledge or authorization, before he began advancing sums from CIBC client lines of credit for his own personal use and benefit.

In one case a client asked Ramgolam to apply more than $34,000 towards their mortgage. He instead used the money obtained from that client’s account to purchase a bank draft which he deposited into one of the fake accounts before withdrawing the amount for his own personal use and benefit. In another instance, Ramgolam withdrew more than $35,000 from another client account and used the proceeds to purchase a bank draft payable to CIBC Mortgages, adding the first client’s mortgage account number to the draft, identifying that client as the remitter. He used the balance to purchase a second bank draft which he then deposited into the fake accounts, again for his own personal use and benefit.

The bank has since compensated the individuals affected by Ramgolam’s misappropriation. Ramgolam has not yet repaid the bank.

“In his dual role he had access to both bank accounts and mutual fund accounts of clients of the related organizations. The respondent acted in a highly unethical manner that was unbecoming and detrimental to the public interest in misappropriating financial assets of individuals in the course of his employment. We were also of the view that when the respondent misappropriated funds from bank clients within the branch, it had the potential to negatively impact the reputation of the member and the securities industry as a whole,” the MFDA writes in its reasons for decision. 

“The respondent’s misconduct was egregious in that, over the course of a year, he deliberately and repeatedly misappropriated funds totaling $116,084 from clients of the member and the bank. While he repaid the sum of $34,081 to one client from monies misappropriated from another client, he retained $82,003.04 for his own personal benefit.” 

The MFDA adds that hearing panels have the power to impose a fine up to three times the profit obtained as a result of the violations. To keep the penalty from impeding Ramgolam’s repayment to the bank, however, the MFDA adds that it will defer payment of the fine until June 2022. “We have also decided at that time the fine is to be reduced by the amount that the respondent has paid to the bank.”