A former fund rep has been fined more than $1.7 million and permanently banned after a regulatory hearing panel found that he misappropriated almost that much from investors, purportedly for his own mortgage business.
A Mutual Fund Dealers Association of Canada (MFDA) hearing panel ruled that Chanrith Yin, a former rep with Equity Associates Inc. in London, Ont., is banned from the industry and ordered to pay a $1.7-million fine and $30,000 in costs.
The sanctions follow a hearing that found Yin violated MFDA rules by misappropriating client money, engaging in unapproved outside business and personal financial dealings with clients, and failing to cooperate with the self-regulatory organization’s investigation.
Specifically, the MFDA alleged that Yin launched a private mortgage lender, Nobis Group Property Management and Leasing, without his dealer’s knowledge.
Clients were solicited to invest in Nobis, which was pitched as a safe investment and promised returns.
However, when those returns failed to materialize, clients began complaining to the dealer. The complaints were then reported to the SRO, prompting a regulatory investigation.
“Because [Yin] did not cooperate in any way in the investigation, there are gaps in our knowledge of how Nobis operated and why it was apparently unsuccessful,” the hearing panel said.
Nevertheless, the panel noted that MFDA counsel presented overwhelming evidence in the case, and it concluded that Yin’s conduct was “egregious.”
“He took substantial sums from a number of ordinary, hard-working persons, who trusted him to invest their funds wisely and prudently,” it said, noting that he took in almost $1.7 million from 11 clients.
About $300,000 of that was paid out to victims of the scheme, leaving almost $1.4 million unaccounted for, the panel said.
“When his conduct was discovered, he vanished and the MFDA has been unable to locate [him],” it said.