Two B.C. investment representatives have recently been banned from their respective industries and fined a total of $217,500 for misappropriating client funds and then misleading regulators.
In two separate decisions this week, the Canadian Investment Regulatory Organization (CIRO) announced penalties against Richmond stockbroker Domino Au-Young, formerly of National Bank Financial Ltd., and Victoria mutual fund dealer Brent Polischuk, formerly of Sun Life Financial Investment Services (Canada) Inc.
Stockbroker misappropriated money, used WeChat, conducted unauthorized business
Au-Young admitted to misappropriating $87,330 from the National accounts of two clients through Â鶹´«Ã½Ó³»Bullion Currency Exchange Richmond and to his personal account.
The misappropriation took place in part due to forged signatures on cheques and fraudulent authorization letters, according to the CIRO settlement agreement.
Au-Young returned the misappropriated money when the clients complained to National, according to the settlement announced Nov. 1.
It's unstated what Au-Young did with the money or why he took it.
Au-Young was also found to have used Chinese-government controlled WeChat to communicate frequently with clients. It is National’s policy that all communication must be routed through National internet servers.
Au-Young also was found to be a shareholder in an outside business without authorization, contrary to rules.
Au-Young is now banned permanently from the securities industry in any capacity and was issued an administrative fine of $125,000, plus costs of $7,500.
The agreement ends Au-Young’s 28-year career, which also included a recent stint with Echelon Wealth Partners Inc.
Au-Young’s case was transferred from the Investment Industry Organization of Canada (IIROC) to CIRO, which now encompasses IIROC and the Mutual Fund Dealers Association (MFDA).
Victoria mutual fund dealer banned after soliciting personal loans
CIRO, via MFDA, also announced significant penalties against Victoria mutual fund dealer Brent Polischuk, on Nov. 2.
Polischuk was banned from conducting securities-related business for any registered mutual fund firm and fined $75,000 plus costs of $10,000 after a hearing panel found Polischuk borrowed money from clients and didn’t fully pay them back.
The Sun Life Financial Investment Services (Canada) Inc. representative improperly borrowed $100,000 in November 2018 from one client who eventually filed a civil court claim in June 2021 against Polischuk after he only paid back $2,500, according to the hearing decision.
The client told Sun Life Polishuk had told the client he was using the money for a real estate investment.
Three other clients provided evidence Polischuk had solicited loans. In one case, a client refused to loan Polischuk $160,000. Polischuk told the client he needed to pay off debt to the Canada Revenue Agency.
When MFDA investigators came knocking they noted “the lack of co-operation was significant” as Polishuk lied to Sun Life and misled investigators.
MFDA staff called Polishuk’s misconduct “serious” as he “abused the trust that he had established with his clients and confidential information about their finances that he acquired in his capacity as an Approved Person in order to borrow money from his clients, resulting in a financial benefit to the Respondent while simultaneously placing the clients’ money at risk.”
While staff sought a penalty of at least $288,000 a hearing panel cut the fine back.
Despite being barred from the mutual fund industry the Insurance Council of BC barred Polischuk for only five years; thereafter he may reapply for a licence.
