A Mutual Fund Dealers Association of Canada (MFDA) hearing panel has fined Seung Tung (Eric) Ng $150,000. Ng is a former mutual fund salesperson with Royal Mutual Funds Inc. in Oakville, Ont. He has also been permanently prohibited from conducting securities-related business in any capacity for infractions that include the misappropriation of client funds and transacting multiple, unauthorized transactions in bank accounts opened at Royal’s owner, the Royal Bank of Canada (RBC). Ng has also been ordered to pay costs of $10,000.
Ng’s infractions against at least four former clients occurred between Nov. 2011 and June 2013 when he was a dealing representative with Royal Mutual Funds. He was also a branch manager and senior account manager with RBC during this time. RBC and Royal Mutual Funds terminated Ng on Sept. 20, 2013 as a result of the events surrounding the allegations.
The MFDA panel found that Ng opened 10 bank accounts at RBC and four investment accounts for five individuals; he did not receive permission from these five individuals to open the accounts and they were unaware of his actions.
These accounts were used to misappropriate approximately $55,129, which was used to pay Ng’s personal expenses. The unauthorized bank accounts were also used to hold proceeds redeemed from the legitimate investment accounts of some of the clients, without the clients’ knowledge. Ng also opened investment accounts in order to purchase mutual funds using money from the clients’ legitimate bank accounts, without the clients’ knowledge.
Three of the five individuals affected by Ng’s actions were over the age of 80.
Ng also failed to co-operate with MFDA staff during the investigation into his conduct. He did not provide a written response to the allegations against him, although MFDA staff had requested he do so in three separate instances beginning in October 2013. He also ignored attempts to arrange an interview with him on the matter.
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