A mutual fund rep who traded crypto assets on behalf of several clients and other investors has been sanctioned in a settlement with the Canadian Investment Regulatory Organization (CIRO) for engaging in securities-related business outside his dealer.
A regulatory hearing panel approved a proposed settlement between CIRO staff and Christopher Leslie Meehan, a rep with Assante Financial Management Ltd. in Abbotsford, B.C., over his crypto trading on behalf of clients, without his dealer’s knowledge or approval.
According to the settlement, between 2019 and 2022, Meehan accepted $1.2 million worth of crypto from eight clients and 22 other investors, which he deposited into his own crypto wallet, so that he could trade the crypto on their behalf.
During the period, he made over 6,000 trades for investors, in over 75 different crypto assets, and received over US$90,000 in compensation for the service.
In 2022, the B.C. Securities Commission (BCSC) issued a cease trade order against a numbered company that Meehan had established, and which entered contracts with the investors governing the trading arrangements. That order stipulated that those contracts amounted to securities that required a prospectus or an exemption.
After the BCSC issued its order, and his dealer began an investigation, Meehan returned all of the investors’ assets, and refunded his commissions.
None of the clients complained to the dealer, or the regulators.
However, following its investigation, the dealer ultimately imposed a $15,000 fine on Meehan, required him to retake the Conduct and Practices Handbook (CPH) course, and subjected him to a period of close supervision.
Under the settlement with CIRO, Meehan acknowledged that he breached CIRO’s rules by engaging in securities-related business outside his dealer. To settle the case, he agreed to a $45,000 fine, to pay $5,000 in costs, and to a four-month suspension.