A hearing panel of the Investment Dealers Association of Canada has permanently banned a broker in the Winnipeg office of BMO Nesbitt Burns Inc. for misappropriating funds.

Following a disciplinary hearing held on April 12, an IDA hearing panel found that Gregory MacKay, a registered rep and assistant branch manager, had misappropriated funds while employed at BMO Nesbitt. BMO Nesbitt interviewed MacKay on April 3, at which time he admitted that he:

  • opened a corporate account in the name of Maples Minor Hockey (Hockey Account) at a local branch of Bank of Montreal;
  • fabricated a company using the name Manitoba MultiMedia Habitat (Habitat);
  • during a period of approximately four years, he wrote invoices for expenses from the Manitoba Hydro Bond Campaign account and the
    Winnipeg Social Club account purportedly incurred by Habitat, and prepared cheques using only the initials MMH as the payable party and then deposited those cheques to the Hockey Account; and
  • used funds deposited to the Hockey Account for personal bad debt purposes.

BMO Nesbitt provided the IDA with their investigative findings, including copies of twenty cheques totaling $138,373.34 made payable to MMH, which BMO Nesbitt confirmed MacKay had deposited into the Hockey Account.

MacKay admitted to the same conduct when interviewed by IDA staff, with the exception that he advised that one of the 20 cheques was legitimate, as representing a $5,000 bonus to himself.

On Aug. 19, 2003, MacKay attended to the Winnipeg Police Service, upon his own volition, and provided a statement that he had misappropriated funds from BMO Nesbitt. MacKay was formally charged with defrauding BMO Nesbitt of monies exceeding $5,000.

On September 30, 2004, the criminal proceedings were held. MacKay entered a guilty plea to the criminal charge and was given a conditional sentence of “Two Years less a day” to be served within the community.

The IDA hearing panel was notified that MacKay had entered into an agreement with BMO Nesbitt to repay the misappropriated funds and that the agreement was being honoured. The panel was also aware that MacKay had no previous disciplinary history. However, the panel determined that the conduct of misappropriation of funds was a very serious infraction and demonstrated a “total disregard of any ethical standards” on MacKay’s part.

For his misconduct, the IDA permanently prohibited McKay from acting in any registered capacity with the association, imposed a fine of $100,000, and ordered him to pay $8,361.92 in costs.