The Toronto-based Investment Industry Regulatory Organization of Canada (IIROC) has fined former financial advisor Pirkko Ann Ramsay of Thunder Bay, Ont. $200,000 for borrowing money and misappropriating funds from clients.
Between June 2009 and March 2010, Ramsay while an employee of both Toronto-based Canadian Imperial Bank of Commerce (CIBC) and CIBC Investor Services Inc. borrowed about $70,000 from two clients, a husband and wife, according to IIROC. Ramsay first started working with the couple in 2002 — when employed by another firm — after they had won money through a lottery. IIROC documents describe the clients as unsophisticated investors who had a close working relationship with Ramsay.
Initially, Ramsay asked for $50,000 from the clients to renovate her home. She told the clients that once the renovations were completed she would sell the house and repay the loan, or, if the house was not sold, Ramsay would repay the loan through bonuses she expected to receive from CIBC. The clients later lent Ramsay another $20,000. Both loans were paid via a bank draft made out to Ramsay’s daughter’s boyfriend. At no point did Ramsay inform CIBC of the loans.
In July and August 2009, the clients would come into the branch to withdraw money via bank draft to pay bills and buy necessities. According to IIROC, during those times Ramsay would have the clients sign two drafts, one for their legitimate needs and one blank document. The blank bank draft would be made payable to one of the following: Ramsay’s daughter’s boyfriend, a friend to whom Ramsay owed money or the friend’s business. As well, during the same time frame, Ramsay would have blank cheques signed by her clients, made out to her’ dauther’s boyfriend or her friend. According to IIROC, Ramsay misappropriated about $64,000 during the summer of 2009 and another $12,000 between 2009 and 2010. None of those funds have been repaid to the clients, according to IIROC.
Ramsay admitted to IIROC having received the loans from her clients but denies misappropriating any funds saying that any money she received from the clietns she asked them for directly. However, Ramsay offered no evidence to IIROC to prove that the funds were not misappropriated. Furthermore, Ramsay failed to cooperate with the regulator’s investigation by not responding to letters from IIROC staff sent by registered mail in 2012.
In addition to the fine, IIROC issued a permanent ban on Ramsay from registering with the self-regulatory organization. As well, Ramsay must pay $36,000 in costs.