A former mutual fund rep who defrauded a pair of investors with a fictitious investment has been fined and permanently banned by the Canadian Investment Regulatory Organization (CIRO).

A hearing panel of the self-regulatory organization found that Alvinder Singh Gill, a former rep with Sun Life Financial Services Inc. in Abbotsford, B.C., misled a paid of investors, misappropriated their money and provided false account statements as part of a scheme involving a fake investment.

Gill also engaged in unapproved outside business activities and failed to cooperate with SRO staff, the panel ruled.

As a result, the panel permanently banned Gill, fining him $310,000 and ordering he pay costs of $30,000.

The panel’s decision said that Gill, who started working for Sun Life as a mutual fund rep in 2001, also became licensed to sell insurance for Canada Life Assurance Co. in 2008, but without Sun Life’s approval.

In 2009, Gill gave up his securities registration and started his own firm, Greynote Group Financial Services. In 2010, he met a retired couple and pitched them on a fake investment — a non-existent real estate fund Gill said was from Canada Life — and ultimately took $329,625 from the investors, purportedly to purchase the fictitious investment.

The first $250,000 of this was received while he wasn’t registered in the securities industry, with the rest coming after he rejoined Sun Life as a fund rep in 2016.

According to the panel’s decision, the scheme began crumbling in 2019 when Gill asked the investors to contribute more money to maintain the investment. They refused, demanding that he liquidate the holding and return their money.

After he failed to do that, the investors complained to Canada Life, which revealed they’d been sold a fake investment. They also complained to Sun Life and to the RCMP.

According to the panel, the investors didn’t receive compensation from either Canada Life or Sun Life. The panel said the investors sued Gill in the Supreme Court of British Columbia, seeking damages for fraud, and eventually reached a settlement requiring him to pay them $450,000. None of that amount has been paid.

CIRO staff sought a fine of $175,000 in its case — composed of $100,000 for defrauding the investors, $25,000 for engaging in unapproved outside business and $50,000 for failing to cooperate with the SRO — along with a permanent ban and $30,000 in costs.

Gill didn’t oppose the ban or $25,000 fine, but argued the penalty for fraud should be $25,000 and that there should be no sanction for his failure to cooperate.

Ultimately, the panel ruled Gill should be fined $260,000 for the fraud and misrepresentation — equivalent to the amount of the investors’ losses in the scheme — and $50,000 for failing to cooperate with regulators.

“It is difficult to imagine misconduct more detrimental to the public interest than [a rep] perpetrating a financial fraud against a retired couple,” the panel stated, adding that the fraud involved “a pattern of continuous deception for roughly a decade that included the extensive use of forged account statements. The defining characteristic of [Gill’s] misconduct was its deliberateness.”

Further, “that [the investors] were not Sun Life mutual fund clients is irrelevant. Lying to a retired couple in order to cheat them out of their money was a blatant and grotesque failure to observe the most basic ethical standards required of registrants,” the panel said in its ruling.