Although his firm ultimately approved his outside business activities, former registered dealing representative, Ryan Todd Small, formerly of Royal Mutual Funds Inc. in Mississauga, Ontario, is being sanctioned for five years, plus fines and costs, after he admitted to engaging in unapproved outside business activities when he solicited clients to invest in a project he had a direct interest in.

A hearing panel of the Canadian Investment Regulatory Organization (CIRO) accepted a settlement agreement with Small, wherein he also admits to incorporating a company and acting as a director of that company without his firm’s approval.

Registered from September 2002 until he resigned in December 2020, Small says he was aware of his obligation to seek approval to engage in outside activities and disclose any conflicts of interest, but didn’t, when he incorporated TVR Developments in June 2017. In February 2020 he submitted an outside activity form to report the business, stating it was a family-owned corporation, purchasing land to eventually build an 15-unit rental apartment in Burlington, Ontario. The settlement agreement states that he was engaged in undisclosed activity until the point when he applied for permission.

In or around October 2020, Small also prepared and provided investors with a PowerPoint presentation to introduce the investment opportunity and solicit investment in a property he had earlier purchased the right to bid on at an agreed upon price. The presentation included purported rates of return, an assessment of the merits of the investment and recommended that potential investors participate.

“The respondent did not ultimately purchase or develop the Brant and Leighland property and the investment opportunity was abandoned,” the settlement agreement states. “There is no evidence that any clients or any other individuals ultimately invested monies into the development of the Brant and Leighland property.” 

They add that Small failed to inform Royal about the extent of his plans to finance a real estate development and did not inform the CIRO member about his plans to solicit clients. (The firm would not approve any outside activity without an attestation signed that the approved person asking for permission would not use their employment to promote the interests of the outside activity.)

In addition to the five-year ban, Small was assessed a fine in the amount of $20,000 and CIRO’s costs, totaling $5,000.