A Mutual Fund Dealers Association of Canada (MFDA) hearing panel has published its decision and reasons in a case where the regulator levied more than $2-million in penalties and costs, and permanently barred the representative from conducting securities related business in any capacity with any MFDA member firm, after it was found that the representative absconded with more than $1,374,210 in client funds. Broken down, the MFDA levied a fine of $1,724,210 and costs in the amount of $30,000.
“The panel has no doubt that the facts presented very clearly prove the misconduct alleged in the four contraventions. Counsel for the MFDA is correct in describing the evidence as overwhelming,” the decision document states.
The allegations against Chanrith Yin, a London, Ontario-area dealing representative with Equity Associates Inc. from June 2007 until January 2020, include allegations that he misappropriated the funds, solicited and obtained money from clients and another individual who was not his client, to invest in unapproved outside investments, engaged in outside business activities that were not disclosed to his firm, and commencing in January 2020, failed to cooperate with an MFDA investigation into his conduct. Over the years, Yin operated under the trade names Prime Wealth and Better Financial.
“The respondent’s conduct was egregious. He took substantial sums from a number of ordinary, hard-working persons, who trusted him to invest their funds wisely and prudently. The MFDA alleges that a total of 11 individuals invested their funds with the respondent. The respondent did this on his own, without the knowledge of the member. When his conduct was discovered, he vanished and the MFDA has been unable to locate his whereabouts,” they state.
Overall, the MFDA attempted to contact Yin by registered and regular mail on two occasions, by email once and using a process server six times. They add that there are other legal proceedings taking place at the present time related to this case, but the regulator has not been given details about the status of those proceedings.
Yin’s activity was discovered when several clients complained to Equity Associates. It was found that he began operating Nobis Group Property Management and Leasing in November 2012 to raise capital to provide private mortgage loans to third parties. Nobis was not reported to the Canadian Securities Association’s national registration database, nor was it disclosed in an audit questionnaire completed in 2018.
When clients wanted to sell some of their investments in Nobis or when interest payments were missed, Yin put clients off, saying he was having personal issues.
“The evidence presented to us, particularly the evidence given by videoconference, dramatically shows how the loss of their investments affected the client’s everyday lives. In one case, a retired person was not able to do the travelling she had hoped to do. Another person could not purchase a house. In other cases, career opportunities were blocked. They all suffered emotionally and in at least one case, physically,” the reasons for decision document states. “The respondent’s conduct is so egregious that he should never be readmitted to the securities industry.”
