IIROC hits Ng with record $5-million fine

The Investment Industry Regulatory Organization of Canada (IIROC) levied the maximum penalty — a $5-million fine and a permanent ban — against former brokerage industry executive Gary Ng after finding that he engaged in fraudulent conduct.

An IIROC hearing panel announced sanctions against Ng — which includes the record fine and permanent ban, along with a $194,000 costs order — after ruling that Ng violated the self-regulatory organization’s rules in connection with a loan financing, and that he failed to cooperate with the SRO’s investigation.

The panel’s decision setting out its findings in the case — both establishing liability and detailing the panel’s rationale for the penalties — has not yet been published by the SRO.

IIROC alleged that Ng engaged in fraudulent conduct when he borrowed approximately $172 million from three different lenders (including the now-defunct fund manager Bridging Finance Inc.) based on falsified collateral. These loans were secured by investment accounts that he didn’t actually control, and vastly overstated the assets in accounts he did own, IIROC said.

According to the SRO’s allegations, Ng created “fictitious account statements, summaries and screen capture images to make it appear that he held millions of dollars in financial assets… when in reality those accounts and the claimed assets did not exist.”

Ng allegedly used about $100 million of the proceeds of the scheme to buy Vancouver-based investment dealer PI Financial Corp. in an all-cash deal in 2018.

PI Financial reported concerns about the collateral to IIROC in January 2020, and Ng resigned the following month.

IIROC said that it didn’t uncover any evidence of client losses as a result of the scheme.

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.