A former fund dealer rep was fined more than $1 million — almost double the amount sought by enforcement staff of the Canadian Investment Regulatory Organization (CIRO) — by a regulatory hearing panel, which found that he misappropriated money from a couple of elderly clients and then fled the country.
Following an uncontested hearing, a CIRO panel ordered $1,064,100 in monetary sanctions against Marc-Antoine Ladeiro, a former rep with Scotia Securities Inc. in Vancouver, who it found breached securities rules by misappropriating $354,700 from two elderly clients between 2019 and 2021. It also permanently banned him, and ordered costs of $18,612.
According to the panel’s decision, an investigation revealed that money was misappropriated from the accounts of a couple of clients that were in their late 80s and early 90s at the time, and transferred into an account that Ladeiro opened for a fictitious client, using the personal information of a client from a previous employer. The stolen money was then “layered back and forth between [the fictittious] accounts before being eventually withdrawn in hundreds of electronic fund transfers.
At the initial hearing in the case, CIRO staff sought a fine of $504,700 against Ladeiro — comprised of $354,700 in disgorgement and a $150,000 fine — along with a permanent ban and $18,000 in costs.
The panel said that while it agreed with the requested ban and costs order, it “had concerns about the sufficiency of the proposed fine” — namely, whether it was large enough to be an adequate deterrent.
The proposed fine “is not commensurate with the gravity of the respondent’s misappropriation and retention of client funds, the absence of mitigating factors, public and industry repugnance at the misconduct, reputational damage to the industry, and the need for general deterrence to restrain similar wrongdoing in others,” it said.
So, the panel reserved its decision, and asked for more information from CIRO staff to help it determine the appropriate fine.
Ultimately, it concluded that a sanction over $1 million was warranted, which represents three times the proceeds of the misconduct.
In arriving at the sanction, the panel said, “The respondent’s misconduct was serious, calculated and deceptive. It targeted very elderly clients, occurred over a period of years, and involved concealment through the falsification of records, use of synthetic accounts and theft of a former client’s personal information. The absence of mitigating factors or consequences of any kind for the misconduct and the need for general deterrence to restrain future wrongdoing are striking features of this deplorable case.”
It also noted that Ladeiro effectively got away with it.
“He has not repaid anything or been held accountable by criminal or civil proceedings, and there is no reason to believe that he will,” it said.
Despite the more stringent sanction, the panel also noted that CIRO staff was unable to locate Ladeiro, who resigned from his firm in February 2022, telling his branch manager that he was moving back to Europe (he was originally from France).
After a client complaint arose against him, the regulator’s efforts to contact him by phone, email and registered mail all came up empty. And, a skip tracer that it hired was also unable to locate him in Canada, France, or online.
The bank compensated the clients for their losses and opportunity costs, although one of them died in 2021, the decision noted.