MFDA Notice of Hearing

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202044

IN THE MATTER OF A DISCIPLINARY HEARING PURSUANT TO SECTIONS 20 AND 24 OF BY-LAW NO. 1 OF THE MUTUAL FUND DEALERS ASSOCIATION OF CANADA

Re: Ramnarine Ramgolam

NOTICE OF HEARING

NOTICE is hereby given that a first appearance will take place by teleconference before a hearing panel of the Central Regional Council (“Hearing Panel”) of the Mutual Fund Dealers Association of Canada (“MFDA”) on October 13, 2020 at 10:00 a.m. (Eastern), or as soon thereafter as the appearance can be held, concerning a disciplinary proceeding commenced by the MFDA against Ramnarine Ramgolam (“Respondent”). Members of the public who would like to listen to the teleconference should contact hearings@mfda.ca to obtain particulars.

DATED: Aug 20, 2020

"Michelle Pong"

Michelle Pong

Director, Regional Councils

Mutual Fund Dealers Association of Canada
121 King St. West, Suite 1000
Toronto, ON M5H 3T9
Telephone: 416-945-5134
Fax: 416-361-9781
E-mail: corporatesecretary@mfda.ca



NOTICE is further given that the MFDA alleges the following violations of the By-laws, Rules or Policies of the MFDA:

Allegation #1: Between June 21, 2017 and June 28, 2018, the Respondent misappropriated approximately $116,084 from 1 client and 12 other individuals, contrary to MFDA Rule 2.1.1.

Allegation #2: Commencing on September 27, 2017, the Respondent borrowed $50,000 from a client, contrary to the policies and procedures of the Member and MFDA Rules 2.1.4, 1.1.2, 2.5.1, and 2.1.1.

PARTICULARS

NOTICE is further given that the following is a summary of the facts alleged and intended to be relied upon by the MFDA at the hearing:

Registration History

  1. From February 2, 2015 to July 6, 2018, the Respondent was registered in Ontario as a dealing representative (formerly known as a mutual fund salesperson), with CIBC Securities Inc. (the “Member”), a Member of the MFDA.
  2. At all material times, the Respondent conducted business at a branch of the Member located in Toronto, Ontario (the “Branch”). The Respondent was also an employee of the Canadian Imperial Bank of Commerce (the “Bank”) which is affiliated with the Member and which operated a Bank branch at the same premises as the Branch.
  3. On July 6, 2018, the Respondent was terminated by the Member as a result of the conduct described herein, and he is no longer registered in the securities industry in any capacity.

Allegation #1 - Misappropriation of Monies

  1. Between June 21, 2017 and June 28, 2018, the Respondent misappropriated approximately $116,084.63 from one client and 12 other individuals, as described in the chart below:

Transaction Date

Individual

Mutual Fund Client

Amount

June 21, 2017

GC

No

$1,505.57

August 3, 2017

MS and MS

No

$11,540.23

August 21, 2017

QY

No

$34,081.69

September 18, 2017

AB

No

$7,500.00

September 26, 2017

IY and NY

No

$5,000.00

May 1, 2018

VD and CD

No

$4,245.47

May 10, 2018

DP

No

$35,487.85

May, 10, 2018

DP

No

$4.76

May 17, 2018

VD and CD

No

$5,300.00

May 25, 2018

MT and BM

Yes (MT)

$7,819.16

June 28, 2018

KA

No

$3,600.00

$116,084.73

  1. The Respondent opened two bank accounts in the name of the Respondent’s cousin, YB (the “Fake Accounts”) at the Bank affiliated with the Member without the knowledge or authorization of YB. The Respondent had sole control of the Fake Accounts.
  2. On May 25, 2018, without the knowledge or authorization of client MT and BM, the Respondent advanced to himself $7,819.16 from the line of credit of client MT and BM as described in the chart above at paragraph 4, and purchased a bank draft in the same amount payable to YB. The Respondent then deposited the bank draft into one of the Fake Accounts, and subsequently withdrew monies from the Fake Accounts for his personal use and benefit.
  3. In addition, the Respondent misappropriated the amounts listed in the chart at paragraph 4 from GC, MS and MS, QY, AB, IY and NY, VD and CD, DP and KA, without their knowledge or authorization by withdrawing monies from their bank accounts, making advances from their personal lines of credit or home equity lines of credit (Home Power Plans) and then proceeding to deposit the funds directly into the Fake Accounts under his control or to purchase drafts or money orders payable to YB for deposit into the Fake Accounts under his control. The Respondent subsequently withdrew the monies for his personal use and benefit.
  4. On or about July 3, 2018, the Bank identified transactions processed by the Respondent in the accounts and credit facilities of the individuals and the client referenced above, and notified the Member. The Bank commenced an investigation that revealed the Respondent’s conduct described herein.
  5. The client and individuals have been compensated for the amounts misappropriated by the Respondent.
  6. By engaging in the conduct described above, the Respondent misappropriated approximately $116,084.73 from 1 client and 12 individuals, contrary to MFDA Rule 2.1.1.

Allegation #2 - Personal Financial Dealings with a Client

  1. At all material times, the Member’s policies and procedures prohibited employees from borrowing monies from clients.
  2. At all material times, client BA was a client of the Member whose accounts were serviced by the Respondent.
  3. In or about September 2017, the Respondent requested a loan in the amount of $50,000 from client BA.
  4. Client BA agreed to loan the Respondent the monies that the Respondent had requested, and on September 27, 2017, the Respondent withdrew $50,000 from client BA’s personal line of credit at the Bank.
  5. The Respondent prepared and provided to client BA a document entitled “Agreement to Borrow Funds”, in which the Respondent confirmed receipt of the $50,000 loan, and agreed to repay the loan to client BA prior to October 27, 2017.
  6. Between November 2, 2017 and May 18, 2018, the Respondent made 3 payments to client BA, totaling $49,900, as follows:

Date

Amount

November 2, 2017

$40,000

January 18, 2018

$5,800

May 18, 2018

$4,100

Total $49,900

  1. The source of funds used by the Respondent to make the 3 payments to client BA was monies that he borrowed from other individuals.
  2. The Respondent did not disclose to the Member that he had borrowed monies from client BA or that he made any payments to client BA, as described above.
  3. By engaging in the conduct described above, the Respondent engaged in personal financial dealings with client BA that gave rise to a conflict or potential conflict of interest, which he failed to disclose to the Member or address by the exercise of responsible business judgment influenced only by the best interests of the client, contrary to the Member’s policies and procedures and MFDA Rules 2.1.4, 1.1.2, 2.5.1, and 2.1.1.

NOTICE is further given that the Respondent shall be entitled to appear and be heard and be represented by counsel or agent at the hearing and to make submissions, present evidence and call, examine and cross-examine witnesses.

NOTICE is further given that MFDA By-laws provide that if, in the opinion of the Hearing Panel, the Respondent:

  • has failed to carry out any agreement with the MFDA;
  • has failed to comply with or carry out the provisions of any federal or provincial statute relating to the business of the Member or of any regulation or policy made pursuant thereto;
  • has failed to comply with the provisions of any By-law, Rule or Policy of the MFDA;
  • has engaged in any business conduct or practice which such Regional Council in its discretion considers unbecoming or not in the public interest; or
  • is otherwise not qualified whether by integrity, solvency, training or experience,

the Hearing Panel has the power to impose any one or more of the following penalties:

  1. a reprimand;
  2. a fine not exceeding the greater of:
    1. $5,000,000.00 per offence; and
    2. an amount equal to three times the profit obtained or loss avoided by such person as a result of committing the violation;
  3. suspension of the authority of the person to conduct securities related business for such specified period and upon such terms as the Hearing Panel may determine;
  4. revocation of the authority of such person to conduct securities related business;
  5. prohibition of the authority of the person to conduct securities related business in any capacity for any period of time; and
  6. such conditions of authority to conduct securities related business as may be considered appropriate by the Hearing Panel.

NOTICE is further given that the Hearing Panel may, in its discretion, require that the Respondent pay the whole or any portion of the costs of the proceedings before the Hearing Panel and any investigation relating thereto.

NOTICE is further given that the Respondent must serve a Reply on Enforcement Counsel and file a Reply with the Office of the Corporate Secretary within twenty (20) days from the date of service of this Notice of Hearing.

A Reply shall be served upon Enforcement Counsel at:

Mutual Fund Dealers Association of Canada
121 King Street West
Suite 1000
Toronto, ON M5H 3T9
Attention: Maria L. Abate
Email: mabate@mfda.ca

A Reply shall be filed by:

  1. providing four copies of the Reply to the Office of the Corporate Secretary by personal delivery, mail or courier to:
    1. The Mutual Fund Dealers Association of Canada
      121 King Street West
      Suite 1000
      Toronto, ON M5H 3T9
      Attention: Office of the Corporate Secretary; or
  2. transmitting one electronic copy of the Reply to the Office of the Corporate Secretary by e-mail at CorporateSecretary@mfda.ca.

A Reply may either:

  1. specifically deny (with a summary of the facts alleged and intended to be relied upon by the Respondent, and the conclusions drawn by the Respondent based on the alleged facts) any or all of the facts alleged or the conclusions drawn by the MFDA in the Notice of Hearing; or
  2. admit the facts alleged and conclusions drawn by the MFDA in the Notice of Hearing and plead circumstances in mitigation of any penalty to be assessed.

NOTICE is further given that the Hearing Panel may accept as having been proven any facts alleged or conclusions drawn by the MFDA in the Notice of Hearing that are not specifically denied in the Reply.

NOTICE is further given that if the Respondent fails:

  1. to serve and file a Reply; or
  2. attend at the hearing specified in the Notice of Hearing, notwithstanding that a Reply may have been served,

the Hearing Panel may proceed with the hearing of the matter on the date and the time and place set out in the Notice of Hearing (or on any subsequent date, at any time and place), without any further notice to and in the absence of the Respondent, and the Hearing Panel may accept the facts alleged or the conclusions drawn by the MFDA in the Notice of Hearing as having been proven and may impose any of the penalties described in the By-laws.

End.

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