A Mutual Fund Dealers Association of Canada (MFDA) hearing panel has permanently banned former TD Investment Securities Inc. representative and TD Bank employee, Libin Shen after Shen admitted to opening fictitious bank and mutual fund accounts to receive promotional monies payable to new banking clients. After making the admission, Shen then ceased cooperating with the MFDA in its investigation.
Registered between July 2015 and December 2018 when he was terminated by TD, Shen reportedly executed a scheme to obtain a welcome offer – a promotional payment of $300 that would be paid to new customers who opened a certain type of account with the bank – by opening at least 46 fictitious TD Bank checking accounts which he could access and control.
Shen then opened “approximately” 40 fictitious mutual fund accounts with TD as well, to satisfy a pre-authorized debit condition that was necessary to establish eligibility for the welcome offer. (The MFDA says it cannot determine the full extent of Shen’s conduct due to his failure to cooperate with MFDA staff’s investigation.)
In opening the accounts Shen created fictitious client profiles, signed the forms, deposited money into the TD Bank checking accounts and set up pre-authorized transactions moving money from the accounts into money market mutual funds in the fictitious investment accounts. “Prior to discovery of the respondent’s conduct, TD Bank had paid a total of $2,700 in welcome offer payments,” the MFDA writes in an agreed statement of facts.
In addition to permanently banning Shen from conducting securities-related business in any capacity with any MFDA member firm, Shen was also fined $35,000 and ordered to pay costs in the amount of $5,000.
