A former mutual fund rep has been fined and banned after regulators found that he misappropriated money by using a client’s identity to open and use banking products, including a line of credit.
A hearing panel of the Canadian Investment Regulatory Organization (CIRO) ordered a $100,000 fine and imposed a permanent ban against Dejan Ristovski, a former rep with CIBC Securities Inc. in Calgary. It also ordered $11,000 in costs against him.
The sanctions followed a disciplinary hearing that found Ristovski breached CIRO’s rules by misappropriating money, engaging in undisclosed personal financial dealings with a client, and refusing to cooperate with the SRO’s investigation. He also didn’t participate in the hearing.
According to the panel’s reasons, the misappropriation that took place wasn’t directly from a client. An investigation by the bank found that Ristovski opened a bank account in a client’s name — along with line of credit and a credit card — by forging her signature on the opening documents.
It alleged that he used the line of credit to keep up with alimony payments, ultimately leaving $8,227 owing when the bank closed it. He also charged $500 to the credit card.
The panel called the case unusual in that he didn’t take money from the client — because she never actually had the money — but instead essentially borrowed on her credit.
“Both accounts were in deficit when the bank stepped in to stop activity. These activities may be called a form of misappropriation and could be said to trigger an obligation to account for funds. They may also be viewed as a form of identity theft,” it said.
It also found that he engaged in undisclosed personal financial dealings with the same client, although as “he did not cooperate with [SRO] staff, the exact nature of the dealings between the parties is obscure.”
“However, we are willing to accept the admission that [Ristovski] made as accurate and he was indebted to [the client],” it said.
The panel ordered the sanctions sought by CIRO staff, noting that the misconduct was “extremely serious.”
“The conduct was flagrant and deceptive to such an extent that the panel’s view is that he would pose a serious risk were he to seek to act as a mutual fund dealing representative again,” it said.