The Investment Industry Regulatory Organization of Canada has permanently banned and fined a former broker with BMO Nesbitt Burns $270,000 for misappropriating client funds.

The violations occurred from or about May to November 2008, while Gregory Rao was a registered representative with the Woodbridge, ON branch of BMO Nesbitt Burns.

In the settlement agreement accepted by an IIROC hearing panel, Rao admits to misappropriating funds from two clients for a total of $195,000.

Specifically, Rao admits to engaging in conduct unbecoming or detrimental to the public interest by:

> depositing $60,000 in client funds into his personal bank account;
> cashing a $35,000 cheque from the same client’s account and taking the funds for his own use; and
> causing a bank draft for $100,000 to be issued from another client’s account funds and depositing the funds in his personal bank account.

The three transactions in client funds were made without the clients’ knowledge or consent.

As a penalty, Rao has agreed to a $270,000 fine and $15,000 in costs. He has also agreed to a permanent ban on registration with an IIROC-regulated firm.

IIROC began its formal investigation into Rao’s conduct in September 2009. He is no longer registered with an IIROC-regulated firm.

IE