A hearing panel of the Mutual Fund Dealers Association of Canada (MFDA) has permanently banned former CIBC Securities Inc. representative Meng Xi Li from conducting securities-related business in any capacity with any MFDA member and fined Li $100,000, plus costs of $7,500, after the representative allowed a client, her husband, to open and trade in an investment account using another person’s identity.
Li also transferred money out of the account into her own personal bank account, falsified a client’s signature and made false or misleading statements to her firm and the MFDA during the course of their investigations.
According to the allegations listed in the MFDA’s notice of hearing, Li, acting upon instructions from “client X,” her husband, opened an unregistered, U.S. dollar investment account in her husband’s nephew’s name. Her husband reportedly signed his nephew’s name and listed his own mailing address and contact information.
The nephew, dubbed “A” in the MFDA’s documents, was not aware that an investment account had been opened in his name. Over the course of a year, Li facilitated the transfer of $1-million from her husband’s account into A’s account. During the course of that year, she also processed 22 purchases and nine redemptions in the account. Proceeds from the redemptions were deposited into an account opened in A’s name, before being transferred back to her husband’s account. Li recorded notes in CIBC’s client management system which falsely described trading instructions from A for each of the 42 trades that were processed in the account during that period. Li also transferred $100,000 from the account to her own account. During CIBC’s investigation, Li said the money was repayment of a loan that A had obtained from her mother. During the course of the MFDA’s investigation, Li said the money was a loan from her husband.
CIBC terminated Li for her conduct in January 2017. Li is not currently registered in the securities industry in any capacity. The MFDA says it will issue its written reasons for the panel’s decision in due course.
