The Mutual Fund Dealers Association of Canada (MFDA) has sanctioned dealing representative, Rakesh Garg, a representative with Worldsource Financial Management Inc. since July 2004, for altering forms without getting a client’s initials, for keeping pre-signed forms and for photocopying client signature pages.
Specifically, the MFDA says he obtained, and in some cases used to process transactions, 17 pre-signed forms for 15 different clients. He twice altered and used transaction forms for two different clients and also photocopied signature pages from account forms that had previously been signed by clients before re-using the signature pages to complete 16 additional forms for eight different clients.
The forms included redemption forms, Registered Educational Savings Plan (RESP) payment forms and purchase forms.
The Mississauga, Ontario representative, registered in the securities industry since August 1999, became the subject of an internal investigation in March 2020 after the firm conducted an audit of the branch where Garg worked. On discovering the pre-signed forms, the firm issued a cautionary letter and commenced an investigation to determine whether the transactions were authorized.
“The member’s investigation included conducting a full review of the respondent’s client files and writing the affected clients in order to review with the clients they transaction history and know your client (KYC) information. No clients responded to the member with any concerns.”
Worldsource then imposed a period of close supervision for over a year, deducting $1,118.55 from Garg’s commissions to pay for the cost of the close supervision.
In his settlement agreement with the MFDA, Garg agreed to pay a fine in the amount of $25,000 and costs in the amount of $2,500.
