The Canadian Investment Regulatory Organization (CIRO) has published its decision and reasons for sanctioning former dealing representative CIBC Securities Inc., Nicholas Andrew Rivet, who was convicted in September 2019 for stealing from an elderly client and friend.
Between December 2017 and January 2018, a hearing panel found that Rivet misappropriated client funds and, in April 2018, created and provided a fictitious document to the client in order to conceal the misappropriation. Rivet is also being sanctioned for processing two trades without obtaining the client’s instructions before he took the funds.
“This case arises from an admitted theft by Nicholas Andrew Rivet, who was registered in Ontario as a dealing representative for a member of the Mutual Fund Dealers Association (MFDA – one of CIRO’s predecessor organizations), CIBC Securities Inc., from November 7, 2016 to May 4, 2018. As well, he was employed by CIBC bank during that same period,” the reasons for decision document states.
The victim was a long-time acquaintance, having formerly been his coach when he was a minor hockey player in North Bay, Ontario, where both resided. “At the time of the theft, D.T. was 75 years old,” they add.
The MFDA investigation did not begin until investigators became aware of Rivet’s conviction from a late September 2019 news article. This, despite the fact that the bank filed a member events tracking system (METS) report from the firm, which stated, among other things, that Rivet was responsible for the theft of cash from a client’s bank account. “The MFDA had been advised of the respondent’s misconduct a full 11 months before its investigation began,” the decision notes.
“Theft from a client, coupled with creating a fake letter to conceal that theft and deceive the client, is behaviour that is simply indefensible. It is not an exaggeration to say it breaches the basic principles which underpin the whole of the financial services industry,”
Despite this, the regulator declined to give Rivet a fine, stating that the stigma of a criminal conviction for a breach of trust is itself a lifetime penalty. “It is hard to imagine any other penalty that could cause a greater level of general deterrence.” In exchange for his guilty plea before the Superior Court of Justice in Ontario, Rivet was sentenced to three years of probation and 240 hours of community service, according to local news reports.
In addition to a permanent prohibition from conducting securities related business with any CIRO member firm, Rivet was also ordered to pay costs in the amount of $7,500.
