Former registered representative with Edward Jones, Zhiping (Davis) Dai, now a registered representative with Leede Jones Gable Inc., is being sanctioned by the Canadian Investment Regulatory Organization (CIRO) for engaging in personal financial dealings with two clients.
The case was resolved using the regulator’s early resolution process, where enforcement staff offer a 30 per cent reduction in the sanctions the regulator might otherwise seek, in exchange for the respondent’s cooperation. All told, Dai was fined $21,000 and ordered to pay costs in the amount of $3,000.
The sanctions come after Dai admitted that he made arrangements involving himself, his sister and his client and longtime friend, WC to move WC’s money into Canada. Dai owed his sister money and needed to send funds to her in China.
“The respondent further explained that money movement in and out of China is risky, so he made an arrangement involving himself, WC and the respondent’s sister,” the decision states.
Dai reportedly deposited his own Canadian dollars into the Canadian trading accounts WC held at Edward Jones using four bank drafts. WC’s bank in China then transferred an equivalent amount to Dai’s sister.
In a separate incident, a client named LC in the decision documents, wanted to make a deposit of $5,000 but did not have this amount in Canada. According to the settlement agreement, Dai’s acquaintance, BM, needed Chinese Yuan. Dai again explained to investigators that money movement in and out of China is risky, so he made another arrangement, wherein LC sent BM the equivalent of $5,000 in Chinese Yuan from her bank account in China to BM’s bank account in China. BM then sent Dai the funds which Dai, in turn, tried to deposit to the client’s account.
Dai was then advised that the draft could not be deposited since financial advisors are prohibited from depositing personal funds into client accounts. When he asked if his name could be obscured using whiteout, his request was declined and reported.
CIRO says Dai has since successfully completed the Conduct Practices Handbook exam. “There was no specific client harm or client losses,” they add.