Rep fined, banned in CIRO settlement

A former investment dealer rep has been fined and permanently banned in a settlement with regulators after admitting to misappropriating clients’ money.

A hearing panel of the Canadian Investment Regulatory Organization (CIRO) approved a settlement with Domino Au-Young, a former rep with National Bank Financial Ltd. (NBF) in Richmond, B.C. The settlement included a $125,000 fine, costs of $7,500 and a permanent ban from the industry.

According to the settlement, Au-Young admitted to misappropriating funds from clients’ accounts, failing to get approval for outside business activity, using unapproved communications methods, and misleading both his firm and the self-regulatory organization in their investigations.

Specifically, regulators found that Au-Young misappropriated US$45,000 from one client and $30,000 from another using forged letters — purportedly from the clients — that instructed his firm to issue cheques to Vancouver Bullion & Currency Exchange, “where he then had the monies transferred into his own bank accounts.”

His firm at the time, NBF, repaid the clients and Au-Young repaid the firm when he was terminated, the settlement noted.

The settlement also said that Au-Young gave false statements about the misappropriations when he was interviewed in NBF’s internal investigation, and in a sworn interview with the SRO’s investigators.

Additionally, he admitted to not getting approval for outside business activity (not related to the financial industry) and that he used WeChat to communicate with several clients, in violation of his firm’s policies.

“The misconduct here took place over a prolonged period of time and was in some instances egregious (misappropriation of funds, deception of the firm and of regulatory investigators),” the panel said in its reasons for approving the settlement.

“In the end, no member of the public was out of pocket, but the damage to the reputation and integrity of the market remained.”

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.