A former fund rep has been fined and permanently banned by a regulatory hearing panel for engaging in undisclosed real estate dealings.
A hearing panel of the Mutual Fund Dealers Association of Canada (MFDA) ordered that Lucillia Sok Cheng Tan, a former rep with WFG Securities Inc. in Burnaby, B.C., be permanently banned, fined $125,000 and ordered to pay $10,000 in costs after finding that she violated MFDA rules.
Following a hearing, the panel found that Tan violated the self-regulatory organization’s rules by engaging in outside business activities between 2012 and 2019, specifically real estate investment businesses that were not approved by the dealer, and failing to disclose conflicts of interest in connection with those real estate dealings.
The panel also found that she failed to co-operate with the SRO’s investigation.
According to the MFDA’s allegations, Tan was terminated by her dealer in 2019, after her involvement with unapproved, undisclosed real estate ventures was uncovered during a branch compliance review.
In 2013, Tan had disclosed her involvement her husband’s real statement venture, A.T. Property Investors Hub Inc. But her fund dealer discovered another venture, Fairflock Partners, whose website was included as part of her email signature that was uncovered during a branch audit.
“The respondent appeared in the promotional video for Fairflock Partners that identified the respondent and her spouse as its founders. The video appeared to be designed to solicit or attract investors, and identified investors who had invested in real estate in the United States with Fairflock,” the MFDA said in its notice, adding that at least five investors, including four clients, invested with the firm.
“The investment by clients in real estate investments with the respondent and her family constituted a conflict or potential conflict of interest which the respondent failed to disclose…or otherwise address by the exercise of responsible business judgment influenced only by the best interests of the clients,” the MFDA said.
Additionally, the MFDA said Tan was “listed in corporate reports and filings as either a director, officer or secretary” of two other corporations, Triumph Homes Real Estate Inc. and Property Investors Hub Inc., which were also not disclosed to her fund dealer.