A hearing panel of the Investment Industry Regulatory Organization of Canada (IIROC) has permanently barred former MD Management Ltd. registered representative, Joan McCarthy from having any access to a marketplace, and fined McCarthy $1-million after she was found to have falsified signatures more than 160 times to misappropriate $775,000 from six elderly clients. In addition to forging their signatures on cheques, it was also found that she forged client signatures on the firm’s cheque register.

Specifically, McCarthy was fined $950,000 for falsifying signatures and stealing funds from client accounts between 2006 and 2019. She was also fined $50,000 for failing to cooperate with an IIROC investigation.

“In an industry that has trust as its most fundamental principle, theft is a repudiation of the most basic industry value. Theft from several clients, carried out over a lengthy period by numerous acts of forgery, and various forms of deceit, adds to the magnitude of this violation,” IIROC states in its decision on sanctions.

The document considers when a permanent ban from the industry and the markets should take place, saying the sanction is appropriate where there has been significant harm to the investing public or the market’s integrity, when the misconduct has an element of criminal activity and when there is reason to believe that the respondent cannot be trusted to act honestly in the future. Significant factors in this case, they say, include the fact that the conduct was premeditated, intentional and had criminal-like components. Another significant factor identified in the decision was the fact that McCarthy was non-cooperative and chose not to attend her own hearings.

“The conduct demonstrates a total lack of integrity and a pattern of dishonesty involving fraudulent conduct over a significant period of time for the personal benefit of the respondent. When the failure to cooperate is added, it is not difficult to conclude here that the respondent’s conduct amounted to a complete rejection of the most fundamental requirements of the industry and has demonstrated that she cannot and should not be trusted to ever be involved in the industry in the future.” 

In addition to the fines and permanent bar, McCarthy was also ordered to pay total costs of $103,522.14.