Former rep fined, banned for misappropriated client money

A former fund rep has been fined and banned by a regulatory hearing panel, which found that he misappropriated client money and failed to cooperate with an investigation.

A hearing panel of the Mutual Fund Dealers Association of Canada (MFDA) ordered that Hon Ting (Patrick) Yung, a former rep with Royal Mutual Funds Inc. in Ottawa, must pay a fine of $300,000 along with $10,000 in costs, and is permanently banned.

The sanctions were handed down following a hearing that upheld the self-regulatory organization’s allegations against him.

Specifically, it alleged that, between October 2017 and October 2019, Yung misappropriated at least $309,956 from both clients and others “by processing early redemptions of [GICs] or by obtaining access to their bank accounts and making withdrawals, without their knowledge or authorization.”

It also alleged that Yung misappropriated money from clients after promising to invest in securities on their behalf through an offshore brokerage.

The MFDA alleged that he spent almost $125,000 of the misappropriated funds, and used much of the rest to buy GICs in his spouse’s name and to contribute to his spouse’s TFSA.

The firm was alerted to the unusual activity in his spouse’s account by the bank, which was able to seize about $92,000 from the TFSA.

It also alleged that he failed to cooperate with its investigation.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.