Dealing rep banned for false and misleading statements

A former CIBC Securities Inc. dealing representative, terminated by his firm in March 2021, is being thrown out of the industry permanently and assessed a $25,000 fine after he admitted to lying to a client and opening an account in their name without authorization, in order to increase his compensation.

A hearing panel of the Canadian Investment Regulatory Organization (CIRO) specifically found that Wanyuan (Simon) Fan opened a new account for a client and processed transactions in the client’s account without authorization, he fabricated a story about the client being required to transfer her assets to a new account, and also signed the client’s signature and initials on account opening forms and submitted them to CIBC Securities for processing.

To cover the forgery, he later recorded false or misleading notes in the firm’s broker system. He is also accused of making false or misleading statements to the firm while it investigated his conduct. 

The Ottawa-area representative, registered since November 2018, was also employed by CIBC. In January 2021, he called his client to discuss opening a mutual fund account and transferring money to that account from a tax-free savings account (TFSA) she held with the bank. That same day Fan prepared new client application forms, signed the client’s signature and three sets of initials, and transferred the entire balance of the client’s TFSA to the new TFSA to purchase a money market mutual fund. 

The decision (sanction) and reasons published by the regulator says Fan falsely represented to the client that a system issue at the branch required the client to open the new TFSA and transfer their entire balance. “The respondent admitted that these representations were false,” the decision states. “He admitted that he processed these transactions to increase his sales volume in order to meet his weekly sales goal and thereby potentially increase his compensation.” 

When the client complained in February 2021, Fan initially insisted that he met with the client and provided investment advice. “Only on March 5, 2021 did the respondent finally admit that he had not met with the client and had forged the signatures on the documents in question.” His registration was terminated that same day.

In addition to the fine and ban from registration, the regulator also assessed costs in the amount of $7,500.