A regulatory panel has suspended and fined a Calgary-based rep after it found that he engaged in undisclosed personal dealings with an elderly client and misled investigators.
Michael Francis O’Brien — who was initially a rep with RBC Dominion Securities Inc. in Calgary, and later with Raymond James Ltd. — has been fined $100,000 by an Investment Industry Regulatory Organization of Canada (IIROC) hearing panel. He was also ordered to pay costs of $20,000, suspended for two years and will be subject to 18 months of close supervision after returning to the industry.
The sanctions decision follows a finding that O’Brien violated IIROC rules by borrowing more than $150,000 from a client, an elderly widow, without his firm’s knowledge.
According to the panel’s decision, O’Brien admitted the undisclosed personal financial dealings in the disciplinary proceedings, but initially misled investigators from both his firm and IIROC when the account activity was investigated by RBC’s fraud detection unit.
The money was repaid to the client, but O’Brien was terminated by RBC for engaging in the borrowing and allegedly making a false statement to the firm’s investigators.
The IIROC hearing panel decision noted that O’Brien has filed an appeal with the Alberta Securities Commission (ASC) regarding the allegation that he misled investigators.
According to the panel’s decision, IIROC enforcement staff sought a permanent ban, a $60,000 fine and $20,000 in costs in the case. O’Brien’s counsel argued that the appropriate penalty would be a six-to-12-month suspension, a fine of between $25,000 and 40,000 and $10,000 in costs.
In determining sanctions, the IIROC panel ultimately found that “a two-year suspension together with a $100,000 fine is necessary to bring home to this respondent the very serious nature of his misconduct and to demonstrate that false statements, repeated acts of evasion and misrepresentation…cause harm to the reputation of the industry and must be deterred.”