The Mutual Fund Dealers Association of Canada (MFDA) published its decision and reasons for permanently banning former W.H. Stuart Mutuals Ltd. and Keybase Financial Group Inc. advisor, Rebecca Wai-Chiu Li and fining Li $850,000 plus costs totaling $20,000.
The Richmond Hill, Ontario representative is accused of engaging in undisclosed and unapproved outside business activities and referral arrangements and of using powers of attorney assigned to her by four clients without telling her firm that she held the powers of attorney over the financial affairs of clients whose accounts she serviced. Li also mislead her firms and the MFDA before she stopped cooperating with the MFDA’s investigation altogether. Li was terminated by her firm in December 2018 and is not currently registered in the securities industry in any capacity.
“Although the full extent and nature of the financial risks and actual harm to others from the respondent’s misconduct remains unknown because of the respondent’s failure to cooperate and provide information, the following is clear: The unauthorized conduct of the respondent concerned at least $2.2-million invested and likely lost by clients and others in syndicated mortgage investments, securities business she was not registered to conduct and business activities outside her member for which she had no permission to conduct and which was unsupervised,” the MFDA writes in its reasons for decision.
Li received at least $173,000 in fees for her unauthorized activities. She also received at least $480,000 from clients that the MFDA says he kept or used for her own benefit. “There was no evidence as to whether those client funds went into the syndicated mortgage investments. There was also no evidence that these funds were returned to clients.”
