The Mutual Fund Dealers Association of Canada (MFDA) has fined a former mutual fund salesman $175,000 for misappropriating client funds.

According to MFDA documents, between 2009 and 2011, Reginald Roskaft misappropriated $111,799 from three clients. At the time, Roskaft was a mutual fund salesman at the Barrie, Ont. sub-branch of Sterling Mutuals Inc. Roskaft resigned from the firm in 2011.

In the case of one client, Roskaft misappropriated a total of $2,200 between 2010 and 2011 claiming that it was to pay taxes on redemptions from the individual’s registered retirement savings plan (RRSP). Roskaft had the client write out cheques to “CRA.” However, according to the MFDA, “CRA” was not the Canadian tax agency but a tax preparation company owned by Roskaft called Corporate Receivables Agency.

In 2009, two other clients took out an advance on their credit cards, totaling $34,599, as a loan to Roskaft. Roskaft provided the clients with a loan agreement saying the money would be deposited in one of his numbered companies and invested.

The clients wrote another cheque to Roskaft for $75,000 in 2011. The cheque was written out to one of Roskaft’s numbered companies and was supposed to be invested on behalf of the clients. Soon after, Roskaft claimed that $25,000 of the $75,000 had been paid as taxes. The clients believed all of their money was invested in their Sterling accounts.

When the clients asked about their Sterling accounts, Roskaft showed them screenshots of accounts that were supposedly theirs, states MFDA documents, but which did not actually reflect their investments or the lack thereof. Roskaft has not returned or accounted for the clients’ money or repaid the principal or interest on the initial loan.

The MFDA also fined Roskaft an additional $75,000 for failing to cooperate with the self-regulatory organization’s investigation and hearing panel in this manner. Roskaft is also permanently banned from conducting securities related business with an MFDA member. Roskaft is not currently registered in the securities industry.