The Mutual Fund Dealers Association of Canada (MFDA) has fined and banned a former rep who admitted to misappropriating over $100,000 and borrowing $50,000 from a client.
An MFDA hearing panel ordered that Ramnarine Ramgolam, a former rep with CIBC Securities Inc. and CIBC employee, should be permanently banned from the industry, fined $140,000 and ordered to pay $10,000 in costs after he admitted to misappropriating over $116,000 from 13 bank customers, including one mutual fund client, and to borrowing $50,000 from another client.
According to the panel’s decision, Ramgolam admitted to the misconduct in an agreed statement of facts, which detailed that he misappropriated money from bank customers by withdrawing funds from their accounts and/or drawing on their lines of credit, and depositing the proceeds into fake accounts he’d set up.
The bank eventually uncovered the transactions and he was terminated.
While some of the money was repaid, the panel found that the customers lost around $82,000, which was repaid by the bank.
The panel noted that Ramgolam has signed an agreement promising to repay the bank a little over $100,000 by May 5, 2022.
According to the panel’s decision, Ramgolam agreed that he should be banned from the industry.
However, he sought a fine of just $20,000 while MFDA staff asked for a $130,000 fine.
The panel ultimately decided that a $140,000 fine was warranted, representing approximately one-and-a-half times the benefit he received from his misconduct (approximately $82,000), plus a penalty for the borrowing activity.
However, it said that collection of the regulatory fine should be deferred until June 1, 2022, so that it doesn’t prevent him from repaying the bank. It also said the fine should be reduced by the amount he repays the bank in that time.
“We are of the view that the permanent prohibition, together with the substantial fine, will serve as a specific and general deterrent and thereby protect the investing public in the future,” the panel said in its ruling.